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Economy

Sinopec to invest $7 billion in Repsol Brazil unit

(Agencies)
Updated: 2010-10-02 08:19

Madrid - Chinese refiner Sinopec Group will invest $7.1 billion in Repsol YPF SA's Brazilian unit as the Spanish oil company raises funds to develop offshore projects in Brazil including the Guara and Carioca discoveries.

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Sinopec will buy new shares in the Brazilian unit and will hold 40 percent of that division after the capital increase, Madrid-based Repsol said on Friday in an e-mailed statement. Repsol will hold the remaining 60 percent stake in the Brazilian unit. Its Brazilian assets are currently valued at $10.7 billion, Repsol said.

Repsol has stakes in blocks in Brazil's Santos, Campos and Espirito Santo basins, and has said it plans to invest as much as $5 billion there from 2010 through 2014, and as much as $9 billion from 2015 through 2019.

Since 2007, Repsol and partners BG Group Plc and Brazil's state-controlled Petroleo Brasileiro SA have found hydrocarbons in the offshore Carioca, Guara and Iguacu fields in the Santos Basin's BM-S-9 block. These are ultra-deep deposits beneath a salt layer under the seabed.

Petrobras, as Brazil's state-controlled oil company is known, estimated in November 2007 that the Santos Basin's pre-salt Tupi field may contain as many as 8 billion barrels of oil, the largest find in the Americas since Mexico's Cantarell field in 1976. Repsol doesn't own a stake in Tupi.