Bloomberg
BP Plc is pulling the plug on two Brazilian deep-water discoveries it bought in 2011 as part of a $3.2 billion acquisition of Devon Energy Corp.’s exploration portfolio in Latin America’s biggest nation. Brazilian independent Petro Rio SA will buy BP’s stakes in the Wahoo and Itaipu discoveries in the country’s second-biggest oil basin for $100 million, plus $40 million when Itaipu reaches first oil, it said Thursday in a filing. The deal signals mergers and acquisitions are picking up at one of the world’s top offshore production regions despite the impact Covid-19 has had on the outlook for oil prices. Petro Rio surged as much as 23% in Sao Paulo, the most on an intraday basis since April. BP was down 3.3% in London.
For BP, it’s a bitter pill to swallow. Wahoo and Itaipu were the star assets of Devon’s Brazil portfolio, which was announced in 2010 and approved in 2011 when oil prices were booming and Brazil’s elephant discoveries in the so-called pre-salt region created a frenzy of interest in exploration acreage. The London-based company never put the fields into commercial production despite a drilling program that found oil. BP also suffered a major exploration setback in Brazil’s pre-salt region last year.
