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Mitsui & Co., Ltd. ("Mitsui", Head Office: Tokyo, President and CEO: Tatsuo Yasunaga) and Mitsui Oil Exploration Co., Ltd. ("MOECO", Head Office: Tokyo, President and CEO Mitsuo Hidaka) have reached an agreement with BG E&P Brasil Ltda. ("BG"), a group company of BG Group plc, to acquire 10% participating interest through Mitsui E&P Brasil Ltda. ("MEPBR"), Mitsui's subsidiary jointly established with MOECO, in four deepwater exploration blocks in Barreirinhas Basin, northern Brazil. A farmout agreement was signed on April 14th, 2015, and subsequently, with all the closing conditions satisfied, including receipt of the Brazilian Petroleum Agency's approval for this deal, the agreement was successfully closed on December 8th, 2015. BG remains as the operator with 65% participating interest.
The four blocks, encompassing 3,077 km2, are located offshore northern Brazil, an under-developed, frontier area with the potential for significant reserves. During the next four years of the exploration period, MEPBR is planning to invest with BG, as well as its existing Thai partner, PTTEP Brasil Investimentos em Exploração e Produção de Petróleo e Gás Ltda. ("PTTEP BL"), in order to carry out exploration activities such as seismic surveys and exploration drilling to confirm the existence of oil and gas in the blocks.
Mitsui has designated the energy and mineral resources business as one of its core business areas. Mitsui actively pursues participation in exploration projects in order to reduce the acquisition cost for additional reserves, aiming to construct a balanced portfolio of "exploration, development and production"1 assets, and build a business foundation with high competitiveness and high growth potential. Since Brazil has enjoyed a series of discoveries of huge oil reserves in recent years, Mitsui views this project as a starting point to further develop and expand Mitsui's E&P business in Brazil and elsewhere in the South American region.
1 The E&P business is divided into three stages: "exploration" to find oil and gas fields large enough to commercialize; "development" to drill production wells and construct production facilities such as platforms; and "production" to sell the oil and gas extracted from beneath the ground using said production facilities. Exploration is inherently high risk, but participating costs are generally correspondingly lower; whereas, despite the lower business risk, participation costs for production projects generally tend to be higher.
|Buyer||Mitsui E&P Brasil ("MEPBR")|
|Seller||BG E&P Brasil ("BG")|
|Acquisition||10% participating interest in four deepwater exploration blocks, Barreirinhas Basin
BAR-M-215 block, BAR-M-217 block
BAR-M-252 block, BAR-M-254 block
|Asset||Deepwater exploration blocks, Barreirinhas Basin|
|65% BG [Operator]
25% PTTEP BL
|Location||Offshore northern Brazil (water depth: 2,000 m)|
|Company Name||BG Group plc|
|Headquarters||Reading, United Kingdom|
|Traded on||London Stock Exchange|
|Business||Broad portfolio of business interests focused on oil and gas exploration & production, and LNG.|
|Total Assets||$61.85 billion*|
|Total Production||0.606 million boe per day*|
|Total Reserves||6.53 billion boe*|
* Financial Year 2014
This announcement contains forward-looking statements. These forward-looking statements are based on Mitsui's current assumptions, expectations and beliefs in light of the information currently possessed by it and involve known and unknown risks, uncertainties and other factors. Such risks, uncertainties and other factors may cause Mitsui's actual results, financial position or cash flows to be materially different from any future results, financial position or cash flows expressed or implied by these forward-looking statements. These risks, uncertainties and other factors referred to above include, but are not limited to, those contained in Mitsui's latest Annual Securities Report and Quarterly Securities Report, and Mitsui undertakes no obligation to publicly update or revise any forward-looking statements.
This announcement is published in order to publicly announce specific facts stated above, and does not constitute a solicitation of investments or any similar act inside or outside of Japan, regarding the shares, bonds or other securities issued by us.