China National Offshore Oil Corp's cooperation with Brazilian oil and gas company Petrobras will expand the former's presence in Brazil's deep-water pre-salt basins, where bountiful oil and gas resources can be found, said industry experts.
The two parties signed a strategic cooperation framework agreement on Monday in Beijing, eyeing a deepening of cooperation in oil and gas exploration and development, refining and the chemical industry, as well as in engineering construction, oilfield services and crude oil trade, said CNOOC.
CNOOC also said the agreement is an important milestone in the development of oil and gas cooperation with Petrobras, and is of great significance in promoting the Belt and Road Initiative and international energy cooperation.
An analyst said major oil and gas companies in China have been expanding domestic production in recent years while acquiring interests in oilfields elsewhere, as the country has been bolstering energy security by diversifying procurement.
CNOOC's oil and gas production is expected to rise more than 6 percent each year during the 2022-24 period, said Li Ziyue, an analyst at BloombergNEF.
The company's continuous upstream investment and production commitment is expected to play a critical role in China's energy supply security, Li said.
Figures released by BloombergNEF showed that Brazil's oil output growth over the past decade was entirely driven by pre-salt production, with pre-salt oil output surging from 70,000 barrels per day in January 2011 to 2.3 million b/d by the third quarter of last year.
Brazil's pre-salt oil projects are very cost-competitive and it is expected that such projects only need to reach $35 per barrel to achieve a break-even status on a project level, said BloombergNEF.
CNOOC has been actively participating in the Brazilian oil and gas markets in recent years. It currently has a 7.34 percent stake in the integrated development of Buzios field in Brazil, the world's largest deepwater pre-salt-producing oilfield with an average water depth of about 2,200 meters.
CNOOC said it attaches great importance to its investments and collaborations in the Brazilian market, which has vast and rich oil and gas resources with numerous oilfields under construction and in production.
In addition to Buzios, the company possesses a 9.65 percent stake in the integrated development of Mero field in Brazil, one of the largest offshore oilfields in the world.
CNOOC is the first foreign company in Brazil to achieve independent natural gas sales. It currently owns five deepwater oil and gas block assets in the South American nation, said the company.
