Jan. 15 (UPI) -- French energy company Total said it's now a premier player in the oil basins off the coast of Brazil after finalizing a partnership with a state energy company.
Total and state-controlled Petróleo Brasileiro, known commonly as Petrobras, announced Monday they finalized a $1.95 billion strategic partnership that gives the French company at least 20 percent of the rights to licenses in the lucrative Santos oil basin off of Brazil's coast.
Using floating production vessels, Total said it's gained a stake in four fields that could combine for 250,000 barrels of oil production per day. About 100,000 bpd is already in production and the rest is expected to come on line gradually through 2019.
Much of the oil from the offshore basins is buried underneath a thick layer of salt on the ocean floor and producers have been able to crack into that in recent years. Output from pre-salt basins has accelerated since 2009 as exploration and production technology acclimates to the region's tough conditions.
Brazil ranks second behind Venezuela in terms of proven oil reserves in South America. Total already started production at the Libra field off the coast of Brazil last year, which holds up to 12 billion barrels of recoverable reserves.
According to consultant group Wood Mackenzie, offshore Brazil is among the "hot oil plays" of the world.
With the multi-billion deal, the French company said its strategic alliance with Petrobras is complete. The Brazilian company said its experience with pre-salt exploration and Total's experience in deep waters makes the arrangement a common-sense match.
"With this alliance, Total is developing a major position in Brazil, in one of the most prolific basins worldwide, by taking advantage of our deep offshore expertise, which is one of our main strengths," Total Chairman and CEO Patrick Pouyanné said in a statement . "We are especially pleased to be the first major to operate a pre-salt producing field in Brazil."
Total started producing oil from the Libra field in November. The French company already works alongside Petrobras in assets in the U.S. waters of the Gulf of Mexico.