OGX closes in on deals with Lukoil, Petronas

4/22/2013

OGX closes in on deals with Lukoil, Petronas

BY JEFF FICK

RIO DE JANEIRO -- Eike Batista is in talks to sell a 40% stake in oil producer OGX Petroleo e Gas Participacoes to Lukoil, the Folha de S. Paulo newspaper reported.

The deal would beef up finances at the entrepreneur's troubled flagship company ahead of an important auction of oil and natural gas concessions next month. Lukoil is conducting due diligence of the company, and the deal could be announced in early May, the newspaper reported.

OGX is also in talks to sell a 40% stake in the company's Tubarao Martelo field to Petronas, the newspaper said. Tubarao Martelo is expected to start producing crude oil by the end of 2013. OGX could also operate fields for Petrobras, the newspaper reported.

OGX denied the report. "The information is not true" an OGX spokeswoman said.

OGX has fallen far short of its crude oil production goals since the Tubarao Azul field first started output in early 2012. The field was expected to reach output of 40,000 bopd by end 2012, but those expectations were slashed by nearly half last year.

In March, technical issues at Tubarao Azul caused production to plummet. The company is carrying out repairs on two of the field's three production wells, with full output not expected to return before June. The field produced 8,300 boepd in March.

Dow Jones Newswires

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