Former executives of Petrobras and Repsol create a new oil company

03/05/2010

Cláudia Schüffner, Rio

Valor Econômico (from Brazil)

In the wave of growing interest in exploration and production activity in the country, a new company emerges with an appetite for occupying a space today attended by a few mid-sized companies.

After OGX, Starfish (now owned by Sonangol) and HRT, the newcomer is Barra Energia Petróleo e Gas Ltda, run by Joao Carlos de Luca, former CEO of Repsol YPF Brasil, and Renato Bertani, former president of Thompson & Knight Energy and Petrobras America, both in the United States.

The company count with the support of a strong international investor, the First Reserve Corporation (FRC), that is committed to invest up to US$ 500 million in exploration and oil and gas production in the country.

The pace for investing the US$ 500 million will depend on how many new opportunities will arise in the future, says De Luca.

Will Honeybourne, managing director of First Reserve Corporation, expressed his toughts about Brazil´s attractiveness : "We see a strong economy, a stable regulatory regime, good access to infrastructure and also a country rich in natural resources relatively unexplored" . He highlighted the stability of the rules established in contracts for post-salt areas.

Barra Energia is already looking for assets to invest. There is no forecast about when will occur the 11 Bid Round to be promoted by ANP - the National Petroleum Agency , therefore the only way to be part of the oil industry will be through acquisition of assets likewise BP / Devon deal, or throughout partnerships in assets operated by other oil companies . This was the case of HRT, which joined Petra Energy and M & S Brazil (former Oil M & S) to jointly explore areas considered "new frontier" in the Solimoes Basin.

De Luca comments that they are already conducting several conversations to "identify opportunities" in the oil sector, and Barra Energia has a business plan focusing on onshore and offshore shallow water areas.

They are interested in the Espírito Santo, Sergipe/ Alagoas and Recôncavo basins. Frontier area such as the Solimoes Basin is not considered as a primary target for the company.

"Barra Energia want to establish a balanced portfolio, and we believe we can contribute with our experience and knowledge to help the growing of the brazilian oil industry," says De Luca.

Renato Bertani explains that Barra Energia is trying to repeat a formula that was very successful in the past , which is to assemble a highly qualified team that brings new ideas and seeks to identify opportunities to implement new concepts in the industry. "We want to bring our expertise in exploration and production to be applied in new plays of oil proved basins. We believe Barra Energia will succeed in its strategy," says Bertani. Among the executives who form Barra Energia are also the exploration geologist Luciano Chagas, and the reservoir engineer Abelardo Sa, both retired from Petrobras.

The First Reserve manages three investment funds totaling US$ 19 billion in assets in the energy sector. The US$ 500 million investment now committed with Barra Energia project, will come from “First Reserve Fund 12”. This particular Fund counts with US$ 9 billion to invest in several projects, and 60% of it (US$ 5.4 billion) is available to invest in the oil sector.

The Funds managed by FR has stakes in 33 companies . These companies operates in sectors ranging from solar energy to specialized service provider such as boat anchoring in deep water, exploration and production activities, pipelines and infrastructure, just to name a few. In Brazil, FRC is partner in three businesses: CHC (Helicopter Operator), DOF Subsea, and ACTEON, which controls the Fluke Engenharia.