Murphy Oil is here `to stay ‘and looks at Petrobras assets

Six months after landing in Brazil along with giant ExxonMobil,  American Murphy Oil is in search of more assets in the country.

Company wants a field to call its own, assuming as operator, and preferably already in production. Murphy Oil is among those inscribed in ANP’s 15th round of oil on Thursday, and is also looking at fields for sale by Petrobras (PETR4 -2.68%), says Gregory Hebertson, vice president of global exploration for company in an interview with Bloomberg.

“We’re just getting started,” Hebertson said. “We intend to stay here for a long time.”

Deciding to invest in Brazil is a strategy seen as controversial for the company, which like other US producers is under pressure from investors to focus on and deliver fast return on cost cutting in a scenario of lower oil prices.

Murphy has a rare hybrid feature in the industry. It produces unconventional gas (shale gas) onshore in North America, and deepwater oil in the rest of the world. Investors would prefer the company to choose one path instead of two types of production with completely different strategies and technologies. But Murphy wants to keep production split in half from the US and Canada onshore, half deepwater overseas.

“It’s time to go explorating now, because you can take advantage of the low costs,” says Hebertson at Bloomberg’s Rio de Janeiro office. “Seismic, rigs, you get everything you need, in a business that is risky, for a low cost. That’s how you get by exploring. ”

The company, which produces 168,000 bpd or less than a tenth of Petrobras, has guaranteed modest short-term growth from its shale gas operations in North America, he says. Over the next three to seven years, growth will come from deepwater operations in Malaysia, Australia, Vietnam and now Brazil. The US has found in the country – a stable democracy, with great reserves and new regulation of oil inviting foreign companies – its perfect pair, he says.

“This will pay off huge dividends for our investors,” he said.

In September, Murphy announced an agreement to buy from Brazil’s QGEP a 20% stake in two deepwater blocks in the Sergipe and Alagoas basin.

Exxon, which initially competed with Murphy for the same QGEP assets, eventually became a partner. The Brazilian company promoted the marriage between the two countrymen.

The American giant, the largest oil company in the West, has become a 50% shareholder; while the QGEP maintained 30% of the two blocks. The three companies then joined together to buy two adjacent blocks in the 14th round in 2017. They are partners in four blocks today.

“It was a way to get at a low cost,” says the executive.

Murphy is now on the lookout for a “good asset” to generate revenue and help fund other projects without production. The giant reserves of the pre-salt, darlings of industry giants, are not in the prime focus of a mid-sized company like Murphy, he says.

“There is a lot of opportunity available to companies of our size in Brazil.”

Source: Info Money