Ecopetrol acquires Gato do Mato interest in Santos presalt

10/21/2019

BOGOTA – Ecopetrol’s Brazilian subsidiary signed an agreement with Shell Brasil Petróleo Ltda. to acquire 30% of the interests, rights and obligations in two areas that correspond to the Gato do Mato discovery, located offshore in the Santos presalt basin.

Shell will reduce its participation from 80% to 50% with this agreement and will continue as an operator, while France's Total will retain the remaining 20%. In addition to the oil companies, the Government of Brazil also participates in the Production Sharing Contract, through Pré-Sal Petróleo S.A. (PPSA). Once this participation is discounted, the consortium proportionally maintains the aforementioned percentages.

According to Ecopetrol estimates, the company could incorporate about 90 MMbbl of crude oil in contingent resources from 2020, which will be gradually added to its balance of reserves. Ecopetrol also estimates that its participation in production could reach about 20,000 boepd in 2025.

In these two blocks three wells that discovered light hydrocarbon have been drilled. The consortium will continue operations aimed at starting production in the coming years.

“The entrance to this discovery in the Brazilian presalt together with world-class companies is aligned with our growth and internationalization strategy, with a focus on high potential basins such as Santos in Brazil. This acquisition allows us to balance our portfolio with a greater amount of light hydrocarbons. In 2018 we announced the entrance to the presalt, an area considered as the major oil leagues in Brazil and one of the most potential in the continent. Today we strengthen that presence by being part of a discovery that will give us production in a few years,” said Felipe Bayón, president of Ecopetrol.

This transaction, which is part of the strategy of capital discipline and growth of reserves and production in a sustainable way, strengthens Ecopetrol's position in the Santos basin in Brazil. Gato do Mato joins the participation in the Pau-Brasil and Saturn blocks.

The agreement signed by Ecopetrol and Shell is subject to the respective transfer approvals in favor of Ecopetrol by the Brazilian Ministry of Mines and Energy, the National Petroleum Agency, Natural Gas and Biofuels of Brazil and other transaction conditions of this nature.

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