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.

Contractual Coverage

Project Overview

Location of acquired blocks

Overview of BG Group

* Financial Year 2014

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