The China National Offshore Oil Corporation (CNOOC) – China’s state-owned oil and gas giant – has announced a new agreement with Brazil’s national energy company Petrobras to expand CNOOC’s presence in Brazil’s deepwater pre-salt basins, according to multiple media reports.
The agreement, signed by the two parties in Beijing on Monday, aims to deepen 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.
CNOOC noted that this “important milestone” in the development of CNOOC-Petrobras oil and gas cooperation will be greatly significant in promoting international energy cooperation and Beijing’s signature development program, the Belt and Road Initiative.
According to figures from BloombergNEF, Brazil’s oil output growth over the past decade has been largely driven by pre-salt deposits – located offshore under deep, thick layers of rock and salt.
The South American giant has grew its pre-salt oil output from 70,000 barrels per day in January 2011 to a whopping 2.3 million barrels per day by the third quarter of last year.
While this type of oil can require significant investment and technical know-how to extract, projects in Brazil have proven very cost-competitive, estimated by BloombergNEF to achieve break-even status at just US$35 per barrel.
CNOOC has been investing accordingly, buying up a 7.34 percent stake in the Buzios field, the largest deepwater pre-salt oilfield in the world, and a 9.65 percent stake in the similarly oil-rich Mero field.
The Chinese company, which owns a total of five deepwater oil and gas block assets in Brazil, said it attaches great importance to its investments and collaborations in the Brazilian market.