Brazil's HRT Buys 60% Stake in Offshore Polvo Oil Field from BP

RIO DE JANEIRO - Brazilian oil start-up HRT Participacoes em Petroleo SA said Monday it would acquire a 60% stake in the offshore Polvo heavy oil field from the local unit of BP Plc for $135 million.

The deal, which is subject to regulator approval, would mark HRT's transformation from a pure exploration play into a small oil producer. Polvo produces about 13,000 barrels of heavy crude oil a day, according to HRT. The Brazilian unit of Denmark's Maersk Oil holds the remaining 40% of Polvo.

BP, meanwhile, sheds an asset that held very little interest for the company after its acquisition in 2011. BP bought Polvo as part of a larger, $3.2 billion deal to acquire the Brazilian assets of Devon Energy Corp. BP had actively sought to sell off its stake in Polvo, looking toward exploring other deep-water prospects acquired from Devon.

HRT, which had a cash position of about $500 million at the end of 2012, said that it would finance a large part of the purchase price via a loan with Credit Suisse.

Given HRT's focus on conserving its cash to fund its exploration plans, the deal likely increases the chance HRT will be nothing more than a bit player in Brazil's upcoming 11th-round auction of oil and natural gas exploration concessions set for May 14-15. In March, HRT Chief Executive Marcio Rocha Mello said in an interview that the company was in talks with several companies about partnerships to participate in the auction, but "without using cash."

HRT recently started drilling its first well of the coast of Namibia. The West African nation is the crown jewel of HRT's portfolio of oil and natural gas exploration blocks. Geologists believe the highly prospective region off Namibia's coast could hold billions of barrels of oil under similar conditions to Brazil's subsalt, where oil was discovered trapped under a thick layer of salt. The two areas were connected millions of years ago.

The company plans to drill three wells off the coast of Namibia this year, while negotiating with other companies to sell an additional stake in the blocks to fund a fourth well.

HRT operates 21 blocks in the Solimoes Basin of Brazil's remote Amazon region with a 55% stake, while Russian partner TNK-Brasil holds the remaining 45%. The two firms have joined forces with state-run energy giant Petroleo Brasileiro to find a strategy to generate cash from natural gas discoveries made in the region.

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Lukoil Executive: Russia Unlikely to Sell Large Rosneft Stake Soon

MOSCOW - The Russian government is unlikely to sell a large stake in state-controlled oil giant OAO Rosneft in the near future and won't give up its dominant position in the energy sector, the deputy chief executive of Russia's biggest non-state oil producer, OAO Lukoil Holdings, said Thursday.

"The state will continue to dominate in the sectors of the economy where it can," Leonid Fedun told the Sberbank Russia Forum 2013.

He added that the current situation in the oil sector reminds him of the mid-1990s, when there were only two sizeable oil companies in Russia: a state-owned one and Lukoil.

The past decade has witnessed the forced bankruptcy of what was once the largest oil producer, OAO Yukos; the takeover of OAO Sibneft by state-owned natural-gas firm OAO Gazprom; and, last month, the acquisition of TNK-BP by Rosneft.

Mr. Fedun said the state will dominate the market until 2018-2019, when it may be faced with falling oil output and will start seeking to improve the management of the companies.

Russian Economy Minister Andrei Belousov said in April the state may reduce its stake in Rosneft by roughly 19% from 69.5% now. Rosneft Chief Executive Igor Sechin opposes the plan.

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Hess Closes ACG Stake Sale with ONGC Videsh

Hess Corporation announced it has completed the sale of its 2.72 percent interest in the Azeri, Chirag and Guneshli Fields (ACG) and its 2.36 percent interest in the associated BTC pipeline to ONGC Videsh Ltd. for $1 billion. Adjusting for net cash flow received since the Jan. 1, 2012 effective date of sale, after tax net proceeds are $884 million.

The BP operated ACG fields, located in the Caspian Sea approximately 62 miles (100 kilometers) east of Baku, commenced production in 1997.

"This sale is another step in the execution of our strategy to become a more focused, higher growth, lower risk pure play exploration and production company," said Chairman and CEO John B. Hess. "Consistent with our announcement on March 4, the after tax net proceeds from this sale will be used to pay down an equivalent amount of short term debt."

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Empyrean Energy Ups Stake in California Project

Empyrean Energy Plc announced it has increased its working interest in the Eagle Oil Pool Development Project in the San Joaquin Basin, California to 57.2126 percent.

The increase in working interest has resulted from previous partner FAR Limited deciding to surrender its interest. FAR Limited has stated the reason for surrendering its interest in the Eagle Oil Pool Development Project along with another non-core asset is to focus operations and exploration efforts on its African assets. There is no direct cost associated with the additional working interest other than the nominal costs of assignment and recording. Empyrean will pay a proportionately higher share (57.2126 percent) of future joint venture costs.

An independent expert has estimated that the Eagle Oil Pool Development Project could contain a P50 (probability 50 percent unrisked) reserve of 7.1 million barrels of recoverable oil and 12.3 billion cubic feet of associated gas, with the P10 assessment estimated at 22.7 million barrels of oil and 22.7 billion cubic feet of associated gas. The Project is a structural-stratigraphic trap play targeting the Eocene aged Gatchell sands. The Project covers approximately 5,160 gross acres with a discovered yet undeveloped oil accumulation. The operator of the Project is TSX-V and ASX-listed Strata X Energy, of Denver, Colorado.

Recent exploration efforts by operators nearby to the Project have targeted other formations including the Kreyenhagen Shale and Monterey Shale. These exploration efforts are being monitored by Strata X Energy to determine if targets in addition to the Gatchell sands should be included in future exploration and testing efforts. The Company currently believes, based on existing results and data, that the Gatchell sands remain the priority target for future testing with potential for the Monterey Shale to be included as a secondary objective. Stratigraphic trap plays such as the Eagle Ford Shale play in Texas, within which the Company's Sugarloaf Project is situated, have become highly sought after in the USA due to modern day advancements in drilling and completion technology. These advancements have allowed unconventional hydrocarbon plays to achieve highly valued production from formations that were previously thought to be either too technically difficult or too expensive to develop.

Strata X Energy has indicated that a vertical well test of the Gatchell sands has merit, subject to the results of nearby exploration wells. Further discussions need to take place with Strata X Energy before any future operational plans are finalized.

"This increased working interest at the Eagle Oil Pool Development Project gives Empyrean greater leverage and flexibility in the project. Given the renewed activity in the San Joaquin Basin we are happy to have been able to add significantly to our working interest in the project at essentially no cost," Empyrean CEO Tom Kelly said.

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Gazprom Wants Stake in Eni's Mozambique Gas Assets

Italian energy company Eni SpA is willing to talk to OAO Gazprom about a natural gas deal in Mozambique, although there has been no interest expressed by the Russia behemoth, Chief Executive Paolo Scaroni said Wednesday.

When ask to comment on speculation about interest from the Russian company, Mr. Scaroni said: "This is news to us especially considering how much gas Gazprom has of its own."

Mr. Scaroni told reporters on the sidelines of a conference in Ravenna, northern Italy: "In the search for a partner in the Mamba [field] in Mozambique, we will listen to them [Gazprom], talk to them," referring to the excellent relationship between the two companies. Eni is Gazprom's biggest international corporate buyer of its gas.

Gazprom is interested in a stake in Eni's project in Mozambique but hasn't made an offer yet, said Sergei Kuprianov, a spokesman for the Russian company. He added that discussions are ongoing.

Last week, Eni agreed to sell a 20% stake in its 70% holding to China National Petroleum Corp. for $4.21 billion in a giant offshore gas asset in Mozambique.

Eni has said it has found reserves of 75 trillion cubic feet in the Mozambique field. According to Bernstein Research this amount corresponds to four years of total European gas demand. It is Eni's largest gas find.

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Gazprom Wants Stake in Eni's Mozambique Gas Assets

Italian energy company Eni SpA is willing to talk to OAO Gazprom about a natural gas deal in Mozambique, although there has been no interest expressed by the Russia behemoth, Chief Executive Paolo Scaroni said Wednesday.

When ask to comment on speculation about interest from the Russian company, Mr. Scaroni said: "This is news to us especially considering how much gas Gazprom has of its own."

Mr. Scaroni told reporters on the sidelines of a conference in Ravenna, northern Italy: "In the search for a partner in the Mamba [field] in Mozambique, we will listen to them [Gazprom], talk to them," referring to the excellent relationship between the two companies. Eni is Gazprom's biggest international corporate buyer of its gas.

Gazprom is interested in a stake in Eni's project in Mozambique but hasn't made an offer yet, said Sergei Kuprianov, a spokesman for the Russian company. He added that discussions are ongoing.

Last week, Eni agreed to sell a 20% stake in its 70% holding to China National Petroleum Corp. for $4.21 billion in a giant offshore gas asset in Mozambique.

Eni has said it has found reserves of 75 trillion cubic feet in the Mozambique field. According to Bernstein Research this amount corresponds to four years of total European gas demand. It is Eni's largest gas find.

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Anadarko Has Talked With Exxon, Shell about Mozambique Gas Stake

Anadarko Petroleum Corp. has held early-stage talks with energy companies Exxon Mobil Corp. and Royal Dutch Shell PLC about selling a share of the U.S. oil firm's massive natural gas discoveries off the coast of Mozambique, a senior government official in the country said Thursday.

The discovery of trillions of cubic feet of natural gas offshore Mozambique by Anadarko and Italy's Eni SpA has piqued the interest of some of the world's leading energy companies, which are keen to get a foothold in an area well placed to serve energy-hungry Asian export markets.

Anadarko, an oil and gas exploration company based outside Houston, has said it wants to sell up to 10% of its share of the energy trove.

"We know of Shell speaking to Anadarko, and of talks with ExxonMobil," said the Mozambique official, who spoke on condition of anonymity. He said, however, that Anadarko's talks with the companies so far hadn't brought firm offers as this would have been communicated to the government.

Anadarko spokesman John Christiansen declined to say which potential buyers Anadarko was talking to.

"We've had a lot of interest from a lot of players--a lot of the majors are very interested," he added.

Exxon spokesman Alan Jeffers said: "We don't comment on potential business opportunities."

Shell declined to comment.

"They don't have to tell us which type of discussions; only when it is at a very, very advanced stage do they come to the government and see if we agree," said the Mozambique official. "We have always said a deal will be acceptable if the buyer satisfies the technical and financial requirements, that is all. It is up to the seller to decide."

While Anadarko and Eni have said they want to retain a share in the finds, both firms have sought out investors to allow them to bank some early profits and defray some of the costs of developing a giant liquefied natural gas plant to cool and ship the gas to Asia.

Eni Thursday announced a deal worth $4.21 billion to sell a 20% stake in its field to Chinese state-owned oil company China National Petroleum Corp.

Although Anadarko and Eni agreed in December to jointly develop an LNG plant, neither has extensive experience with building and operating LNG plants, which can cost up to 10s of billions of dollars. By contrast, Exxon and Shell are two of the world's leading LNG investors and shippers.

"Anadarko wants someone with LNG expertise," said the official.

For Shell, buying into Anadarko's license area would be its second attempt at getting a position in Mozambique. Last year, the Anglo-Dutch energy company was outbid by Thailand's PTT Exploration & Production, which snapped up Anadarko's junior partner in the field, London-listed Cove Energy, for $1.9 billion.

Ben Lefebvre in Houston contributed to this report.

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Anadarko Has Talked With Exxon, Shell about Mozambique Gas Stake

Anadarko Petroleum Corp. has held early-stage talks with energy companies Exxon Mobil Corp. and Royal Dutch Shell PLC about selling a share of the U.S. oil firm's massive natural gas discoveries off the coast of Mozambique, a senior government official in the country said Thursday.

The discovery of trillions of cubic feet of natural gas offshore Mozambique by Anadarko and Italy's Eni SpA has piqued the interest of some of the world's leading energy companies, which are keen to get a foothold in an area well placed to serve energy-hungry Asian export markets.

Anadarko, an oil and gas exploration company based outside Houston, has said it wants to sell up to 10% of its share of the energy trove.

"We know of Shell speaking to Anadarko, and of talks with ExxonMobil," said the Mozambique official, who spoke on condition of anonymity. He said, however, that Anadarko's talks with the companies so far hadn't brought firm offers as this would have been communicated to the government.

Anadarko spokesman John Christiansen declined to say which potential buyers Anadarko was talking to.

"We've had a lot of interest from a lot of players--a lot of the majors are very interested," he added.

Exxon spokesman Alan Jeffers said: "We don't comment on potential business opportunities."

Shell declined to comment.

"They don't have to tell us which type of discussions; only when it is at a very, very advanced stage do they come to the government and see if we agree," said the Mozambique official. "We have always said a deal will be acceptable if the buyer satisfies the technical and financial requirements, that is all. It is up to the seller to decide."

While Anadarko and Eni have said they want to retain a share in the finds, both firms have sought out investors to allow them to bank some early profits and defray some of the costs of developing a giant liquefied natural gas plant to cool and ship the gas to Asia.

Eni Thursday announced a deal worth $4.21 billion to sell a 20% stake in its field to Chinese state-owned oil company China National Petroleum Corp.

Although Anadarko and Eni agreed in December to jointly develop an LNG plant, neither has extensive experience with building and operating LNG plants, which can cost up to 10s of billions of dollars. By contrast, Exxon and Shell are two of the world's leading LNG investors and shippers.

"Anadarko wants someone with LNG expertise," said the official.

For Shell, buying into Anadarko's license area would be its second attempt at getting a position in Mozambique. Last year, the Anglo-Dutch energy company was outbid by Thailand's PTT Exploration & Production, which snapped up Anadarko's junior partner in the field, London-listed Cove Energy, for $1.9 billion.

Ben Lefebvre in Houston contributed to this report.

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New World Sees Danica Jutland Stake Doubled to 25%

New World Oil and Gas announced Friday that the Danish Energy Authority has approved the assignment to its Danish subsidiary an additional 12.5-percent working interest in licenses 1/09 and 2/09. Consequently, the company's working interest in the Danica Jutland project has increased to 25 percent.

The Danica Jutland licenses are located in what New World describes as the "highly prospective" Jutland onshore area of southwest Denmark, covering a total area of approximately 1,575 square miles. The additional 12.5-percent working interest is a second tranche promised to New World under a farm-out agreement announced Oct. 11 2011, following the acquisition of 2D seismic data.

New World CEO William Kelleher commented in a company statement:

"At our Danica Jutland project, we have combined P50 indicative volumetrics and success case economic outcomes totalling 134 million barrels of oil equivalent and a NPV10 [net present value] of $1.22 billion net to New World. These numbers include only the three of 10 identified prospects or leads that have been formally reported on. As with our other Danish project, Danica Resources, there is considerable potential to significantly increase the combined volumetrics further.

"In Denmark as a whole, we have identified 39 prospects/ leads, a number of which have the potential to be company makers in their own right. With this in mind, we are looking forward to advancing operations in Denmark later this year, as we aim to deliver on our goal of building a leading oil and gas exploration and production company."

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Repsol Sells Stake to Temasek Holdings

Singapore state investment company Temasek Holdings said Monday it acquired 5% of Repsol SA for 1.04 billion euros ($1.35 billion), as part of a strategy to increase its exposure to the energy sector.

The share sale further boosts Repsol's balance sheet, following an agreement last week to sell most of its liquefied natural gas assets to Royal Dutch Shell PLC for $4.4 billion in cash, plus the assumption of $2.3 billion in debt.

Repsol, the Spanish oil group, is selling off assets and paying down debt as it strives to protect its investment-grade credit rating, which was hurt by the nationalization of its controlling stake in Argentine energy company YPF SA last year. Its credit rating is on the brink of junk status.

The deal announced Monday builds on an existing stake to make Temasek the fourth-largest shareholder in Repsol, with a total holding of 6.3%. Spain's Caixabank SA is Repsol's largest shareholder with a 12.98% stake. Mexican national oil company Petroleos Mexicanos and Spanish construction firm Sacyr Vallehermoso SA hold stakes of around 9.5% each in Repsol.

It is the Singaporean fund's largest investment in Spain to date and one of its biggest in the energy sector. Temasek, which owns a $157 billion securities portfolio, doubled the size of the energy sector in its portfolio to 6% in the year to March 2012.

The energy sector is a good proxy for the needs of transforming economies with growing middle-income populations, both of which are part of Temasek's investment approach, said Tay Sulian, managing director of investment at Temasek. "We will continue to look for good, long-term investments in the energy space," he said.

The share sale represents "important international backing of our growth strategy," said Repsol Chairman Antonio Brufau.

Monday's deal allows Repsol to unwind a transaction it had made in December 2011 when it used its own cash to purchase a 10% stake from Sacyr, a debt-laden builder that was being forced by its creditors to cut its stake in Repsol from 20% to raise cash.

The 64.7 million Repsol shares sold Monday were bought by Temasek at EUR16.01 each. Repsol had sold the other 5% it acquired from Sacyr to several institutional shareholders in January 2012 at EUR22.35 apiece. Since then, Repsol's shares have declined because of the YPF nationalization.

P.R. Venkat in Singapore contributed to this article.

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Kogas Hires Advisor on Potential Sale of GLNG Stake

SEOUL - South Korean state-run utility Korea Gas Corp, or Kogas, said Thursday it has selected Samsung Securities to advise on the potential sale of a stake in Australia's $18.5 billion GLNG liquefied natural gas project.

The process - to be jointly run by Rothschild - will consider the sale of two-thirds of Kogas' 15 percent stake, which the Korean company acquired in late 2010 for 665 million Australian dollars (US $688 million), a person familiar with the matter added.

The move comes as projects like GLNG that aim to convert coal seam gas (CSG) to LNG for export are facing headwinds from rising labor and equipment costs and a high Australian dollar, eroding potential returns for investors. Confidence in the sector is also being overshadowed by competition from potential new gas exporters like the U.S. and Canada, which are preparing to ship LNG to Asia.

GLNG, operated by Australia's Santos and also counting Malaysia's Petronas and France's Total as major shareholders, has already overrun its budget by 16 percent from an original forecast of $16 billion.

Analysts think further overruns are inevitable, not least because the budget was put together when the Australian dollar was at a lower rate against the U.S. dollar. In a December report, Goldman Sachs predicted it will cost $20.6 billion to build.

The GLNG project is one of four multibillion dollar gas-export projects under construction or planned at Gladstone, a port city in eastern Australia's Queensland state. BG Group is leading development of the Queensland Curtis LNG project, while the Australia Pacific LNG venture of Origin Energy, ConocoPhillips and China Petrochemical Corp, or Sinopec, is targeting first exports in 2015. Royal Dutch Shell and PetroChina are yet to decide whether to begin building their Arrow Energy LNG project.

"No final decisions have been made on whether to divest the stake in the Gladstone project," a Kogas spokesman said by phone. Any decision will be made based on recommendations by the advisers, he said, declining to comment further.

The GLNG project involves building two processing units, known as trains, capable of producing a combined 7.8 million metric tonnes of LNG a year. Kogas will take 3.5 million tonnes of this, a similar amount will be delivered to Petronas and the remainder is to be sold on the spot market.

The move comes two years after Kogas, the world's largest corporate buyer of LNG, said it may sell around a 10 percent stake in the Gladstone project to Korean or Japanese companies. It has been seeking ways to alleviate its hefty debt burden, an obstacle that has held the firm back from aggressively expanding its overseas gas assets.

According to the company's latest financial statement, it had a debt ratio of 361 percent as of end-September 2012.

One of the company's most successful ventures has been a Mozambique gas project with Italian major Eni. Kogas has said it would like to increase its current 10 percent stake in the offshore gas field given good prospects that more reserves will be found.

A Kogas executive, however, has said Kogas would need strategic partners to help finance any further stake increase, given the wide scope of other projects it needs to pay for and execute.

Corporate activity among LNG projects at Gladstone remains high, even though none of the projects is expected to ship LNG this year.

BG Group last year sold an additional 40 percent interest in the first production facility at its Queensland liquefied natural gas project to China National Offshore Oil Corp for $1.93 billion, giving the Chinese company known as CNOOC a half-share in the plant.

Origin and Conoco are currently seeking a buyer for a combined 15 percent stake in APLNG, which would reduce their holdings to 30 percent each.

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Marubeni to Spend $1B for Gulfstar One Stake

Marubeni confirmed Wednesday that it will buy a 49 percent stake in Gulfstar One, the latter – a company launched by William Partners – is currently constructing a floating platform at the offshore Tubular Bells field held by Hess Corporation and Chevron.

The $1 billion deal could pave a way for Marubeni to participate in North America's expanding shale gas segment.

"Infrastructure projects related to oil and gas production, processing, transportation and distribution have been one of the focused business areas for Marubeni, as represented by its recent investments in gas processing, transportation and distribution projects in Australia," the company said in a statement.

"Marubeni aims to grow this business segment through participation in this project and development of their relationship with Williams," the company added.

The Gulfstar spar platform, designed to process 60,000 barrels of oil per day and 200 million standard cubic feet of gas per day, will be installed in Block 768 of the Gulf of Mexico's Mississippi Canyon area in 4,300 feet of water.

Marubeni and Williams also inked an agreement to cooperate on petrochemical downstream projects, and oil and gas infrastructure developments utilizing gas produced in North America including shale plays.

The Tubular Bells prospect on the Mississippi Canyon Block 725, roughly 135 miles (217 kilometers) southeast of New Orleans, was discovered by the Deepwater Horizon semisub Oct. 29, 2003. The discovery well, drilled to a depth of 31,131 feet (9,489 meters) in approximately 4,300 feet (1,311 meters) of water, found 190 feet (58 meters) of net oil pay. Following the Tubular Bells discovery, a successful appraisal well was drilled in 2006 and encountered hydrocarbons 5 miles (8 kilometers) from the initial well.

BP hired Ocean Confidence (UDW semisub) to drill two sidetrack wells to further delineate the field. A sidetrack well was completed in 1Q 2007, followed by a further appraisal well spudded in October of that same year.

Quintella has reported on the upstream and downstream oil and petrochemicals markets from 2004. Email Quintella at quintella.koh@rigzone.com.

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Marubeni to Spend $1B for Gulfstar One Stake

Marubeni confirmed Wednesday that it will buy a 49 percent stake in Gulfstar One, the latter – a company launched by William Partners – is currently constructing a floating platform at the offshore Tubular Bells field held by Hess Corporation and Chevron.

The $1 billion deal could pave a way for Marubeni to participate in North America's expanding shale gas segment.

"Infrastructure projects related to oil and gas production, processing, transportation and distribution have been one of the focused business areas for Marubeni, as represented by its recent investments in gas processing, transportation and distribution projects in Australia," the company said in a statement.

"Marubeni aims to grow this business segment through participation in this project and development of their relationship with Williams," the company added.

The Gulfstar spar platform, designed to process 60,000 barrels of oil per day and 200 million standard cubic feet of gas per day, will be installed in Block 768 of the Gulf of Mexico's Mississippi Canyon area in 4,300 feet of water.

Marubeni and Williams also inked an agreement to cooperate on petrochemical downstream projects, and oil and gas infrastructure developments utilizing gas produced in North America including shale plays.

The Tubular Bells prospect on the Mississippi Canyon Block 725, roughly 135 miles (217 kilometers) southeast of New Orleans, was discovered by the Deepwater Horizon semisub Oct. 29, 2003. The discovery well, drilled to a depth of 31,131 feet (9,489 meters) in approximately 4,300 feet (1,311 meters) of water, found 190 feet (58 meters) of net oil pay. Following the Tubular Bells discovery, a successful appraisal well was drilled in 2006 and encountered hydrocarbons 5 miles (8 kilometers) from the initial well.

BP hired Ocean Confidence (UDW semisub) to drill two sidetrack wells to further delineate the field. A sidetrack well was completed in 1Q 2007, followed by a further appraisal well spudded in October of that same year.

Quintella has reported on the upstream and downstream oil and petrochemicals markets from 2004. Email Quintella at quintella.koh@rigzone.com.

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Brazil's HRT: Namibia Regulators Approve Stake Sale to Galp

RIO DE JANEIRO--Brazilian oil startup HRT Participacoes em Petroleo SA (HRTPY, HRTP3.BR) said late Thursday that Namibia's Mines and Energy Ministry approved the sale of a stake in three offshore blocks to Portugal's Galp Energia (GALP.LB).

In the deal, first announced in November, the two companies said that Galp had acquired a 14% stake in the three exploration blocks in return for covering a portion of drilling costs.

The deal helps clear the way for HRT to start drilling in the highly prospective region off Namibia's coast, which geologists believe could hold an area similar to Brazil's subsalt because the two areas were connected millions of years ago. Billions of barrels of crude oil were discovered under a thick layer of salt in the Atlantic Ocean off Brazil.

"We can confirm we will commence operations in [first-quarter 2013] for our exploratory campaign in Namibia," HRT Chief Executive Marcio Rocha Mello said in a statement. Earlier this month, HRT recently received the drilling rig that will be used to drill exploration wells in the offshore blocks.

Oil-industry consultants DeGolyer and MacNaughton pegged average prospective resources for HRT's offshore acreage in Namibia at 7.4 billion barrels of oil equivalent. Average prospective resources are a preliminary measure used by the industry to indicate oil volumes that could be recovered from undiscovered deposits.

HRT holds operating stakes in 10 blocks and minority shares in two others in the Walvis, Orange and Namibe basins.

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Brazil's HRT: Namibia Regulators Approve Stake Sale to Galp

RIO DE JANEIRO--Brazilian oil startup HRT Participacoes em Petroleo SA (HRTPY, HRTP3.BR) said late Thursday that Namibia's Mines and Energy Ministry approved the sale of a stake in three offshore blocks to Portugal's Galp Energia (GALP.LB).

In the deal, first announced in November, the two companies said that Galp had acquired a 14% stake in the three exploration blocks in return for covering a portion of drilling costs.

The deal helps clear the way for HRT to start drilling in the highly prospective region off Namibia's coast, which geologists believe could hold an area similar to Brazil's subsalt because the two areas were connected millions of years ago. Billions of barrels of crude oil were discovered under a thick layer of salt in the Atlantic Ocean off Brazil.

"We can confirm we will commence operations in [first-quarter 2013] for our exploratory campaign in Namibia," HRT Chief Executive Marcio Rocha Mello said in a statement. Earlier this month, HRT recently received the drilling rig that will be used to drill exploration wells in the offshore blocks.

Oil-industry consultants DeGolyer and MacNaughton pegged average prospective resources for HRT's offshore acreage in Namibia at 7.4 billion barrels of oil equivalent. Average prospective resources are a preliminary measure used by the industry to indicate oil volumes that could be recovered from undiscovered deposits.

HRT holds operating stakes in 10 blocks and minority shares in two others in the Walvis, Orange and Namibe basins.

Copyright (c) 2012 Dow Jones & Company, Inc.

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