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Galp-Petrobras Consortium Secures Exploration Rights Offshore Brazil

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Key Takeaways

  • GLPEY and PBR won exploration rights for three Pelotas Basin blocks in Brazil's latest auction.
  • Petrobras will operate the consortium with 70% interest, while GLPEY holds the remaining 30% stake.
  • The winning bid includes a signature bonus payment of 139 million Brazilian Reais for the three blocks.

Galp Energia SGPS SA (GLPEY - Free Report) , a Portuguese oil and gas firm, has announced that it has snapped up three offshore blocks, as part of a consortium with Petrobras S.A. (PBR - Free Report) , in the latest auction hosted by Brazil’s National Petroleum Agency. The National Petroleum, Natural Gas and Biofuels Agency (ANP) of Brazil recently hosted the fifth Permanent Concession Offer cycle, where several oil majors, including Chevron, ExxonMobil, and Equinor, have participated.

The consortium, consisting of Galp Energia and Petrobras, has successfully won exploration rights for the blocks P-M-1670, P-M-1672, and P-M-1741 in the Pelotas Basin, offshore Brazil. Petrobras is the operator of the consortium, holding a 70% interest, while Galp Energia has a 30% interest. PBR mentioned that the signature bonus to be paid for winning exploration rights in these offshore blocks amounts to 139 million Brazilian Reais.

The latest round of auctions by the ANP sparked a huge controversy regarding the environmental impact of offering exploration rights in the Foz do Amazonas basin, where two consortia, comprising Petrobras and ExxonMobil, secured 10 offshore blocks in total. The Brazilian National Petroleum Agency put up 147 blocks for auction, including the Foz do Amazonas basin, with 47 offshore blocks, the Pelotas Basin with 34 blocks, the prolific Santos Basin with 50 blocks, and 16 offshore blocks in the Potiguar Basin. The proximity of these regions to the Amazon rainforest makes oil and gas operations here highly controversial.

Zacks Rank & Key Picks

GLPEY currently carries a Zacks Rank #4 (Sell), while PBR holds a Zacks Rank #3 (Hold).

Some better-ranked stocks from the energy sector are Flotek Industries Inc. (FTK - Free Report) and Oceaneering International (OII - Free Report) . While Flotek Industries sports a Zacks Rank #1 (Strong Buy) at present, Oceaneering International carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Flotek Industries specializes in green chemistry, which provides innovative solutions aimed at reducing the environmental impact of the energy industry. Flotek develops specialty chemicals tailored for both domestic and international energy producers, as well as oilfield service companies. These chemicals not only help reduce the environmental impact of hydrocarbon production but also lower operational costs.

Oceaneering International delivers integrated technology solutions across all stages of the offshore oilfield lifecycle. The company is a leading offshore equipment and technology solutions provider to the energy industry. OII’s proven ability to deliver innovative, integrated solutions supports ongoing client retention and new business opportunities, ensuring steady revenue growth.

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