AP Moller-Maersk subsidiary Maersk Olie og Gas (Maersk Oil) will take a US$1.7 billion impairment on its Brazilian assets, it announced 9 July. The Danish company specifically cited disappointing appraisals as one of the reasons it has “revised its strategy and will no longer pursue growth or operatorship for its business in Brazil.”
In 2011, the Danish company acquired acreage in the Campos basin’s Polvo, Wahoo and Itaipu fields for US$2.4 billion. Maersk Oil said it will no longer seek operatorship for any of its Brazilian blocks and will now unload its 40% interest in Polvo to Brazilian operator HRT Oil & Gas. The remaining assets, the Anadarko Petroleum-operated Wahoo and the BP-operated Itaipu, will be written down to $600 million.
Maersk Oil entered Brazil in 2001 with the acquisition of SK do Brasil.
“The SK Energy investment was made at a time when the outlook for the oil industry and oil prices were more positive than today and we had growth ambitions for our Brazilian oil business,” Maersk Oil Group CEO Nils S. Andersen said. ““It’s of course clearly unsatisfactory that the oil volumes in the acquired fields Itaipu and Wahoo after appraisal drilling has proved to be in the low end of our original expectations.”
Maersk Oil’s decision echoes one made by partner BP in late December 2013. After non-commercial findings of oil or gas in the Pitanga well in Block BM-CAL-13 of the Camumu-Almada basin, the supermajor booked a $1.08 billion writedown. Petrobras previously made an oil discovery in the basin, located off the southern coast of Bahia state, in 2008.
Unfettered by the writedown, Maersk Group’s guidance will remain an “underlying profit” of about $4 billion, the company said.
Polvo, in the meantime, has had no problem attracting looks from players. Earlier this year, in January, HRT acquired BP’s 60% stake and the operatorships in the Polvo field for $101 million. Immediately following the BP transaction, BW Offshore, owner and operator of the associated FPSO Polvo (pictured), signed a letter of to acquire a 30% stake.
HRT advances Polvo (May 2014 article from OE magazine)