Case Study

Technical advice for a $1.5 billion investment in West African deep water

Due diligence for Petrobras developments and plans offshore Nigeria

Client

Banco BTG Pactual S.A.

Assets

Oil and gas

Results

$1.5bn joint venture investment

Client Challenge

Petrobras wanted a joint venture partner for the exploration and production of oil and gas from its deepwater African assets. The portfolio included non-operated stakes in three developments offshore Nigeria: Akpo (producing), Agbami (producing) and Egina (un-sanctioned project), as well as several prospects in Angola, Benin, Namibia and Tanzania.

We were asked to act as the technical advisor to Banco BTG Pactual S.A., a Brazilian Investment Bank, during the investment process. The producing assets, each comprising a large FPSO and significant subsea systems, were complex, as was the planned Egina development, with an estimated $16bn capital expenditure. Reviewing the significant volume of information, and identifying the value drivers in limited time, were the main challenges. This required coordination between a multidisciplinary team of engineers, evaluating both subsurface and facilities.

How we helped

We provided an independent assessment and verification of the subsurface, facilities and HSE elements of the asset. We focused on the following areas for this due diligence exercise:

  • review and technical assessment of the existing facilities and planned future development projects
  • independent assessment and verification of associated production forecasts for various subsurface scenarios
  • assessment of future capital expenditure (CAPEX), drilling expenditure (DRILLEX), operations expenditure (OPEX) and abandonment expenditure (ABEX) profiles
  • assessment of asset integrity and operating practices
  • assessment of health, safety and environmental (HSE) exposure and regulatory compliance requirements
  • liaison with economists and commercial advisors

Business Benefits

Through close collaboration with subsurface and facilities teams, we provided Banco BTG Pactual and its commercial advisors with a suite of production and cost profiles. This allowed a wide range of potential scenarios to be considered in negotiations. Ultimately, our advice supported a $1.5bn investment in a 50:50 joint venture. Our involvement continued after the deal, providing reports on reserves to the joint venture.

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