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Brazil M&A: operator landscape grows

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15 June 2021

Brazil M&A: operator landscape grows

Report summary

Petrobras continues to dominate Brazil’s upstream sector. But its divestments have begun to change the operator landscape, building the stage for small to medium-sized E&Ps. Most of the entrants have yet to release details on their redevelopment plans, but we have taken a view on the potential. Upside on our 10 selected deals is significant – US$3 billion of NPV10. Still, investment opportunities won’t come without challenges. We analyzed the most impactful risks, strengths and key support factors.

Table of contents

  • Executive summary
    • Opportunity pipeline: Petrobras’ divestment plan
    • Buyer playbook: challenges and strengths
    • Methodology: quantifying the upside
    • Upside potential: beyond our base case valuation
    • Support factors: reduced royalties
    • Access to capital: surprisingly well-funded for now
    • Capex commitments: quick paybacks despite sizable investments
    • Decommissioning: framework remains murky
    • Finding a market: reliance on Petrobras
    • Environmental regulation: state-by-state approach for onshore
    • Private equity: nothing is everlasting
    • The Brazil model: learning from overseas
  • Annex: quantifying the upside potential

Tables and charts

This report includes 6 images and tables including:

  • Among the 10 assets we selected for this analysis, Albacora and Papa-Terra stand out
  • We ran upside scenarios for the 10 assets below based on water depth, basin, maturity and size
  • Recent upstream asset sales highlighting case studies
  • Remaining NPV10 comparison for the selected assets under different Brent scenarios
  • Gearing evolution for key E&Ps
  • Payback time for selected assets before and after deal considerations

What's included

This report contains:

  • Document

    Remaining NPV10 And Reserves Summary.xlsx

    XLSX 97.00 KB

  • Document

    Upside Potential Scenarios Details.xlsx

    XLSX 6.56 MB

  • Document

    Brazil M&A: operator landscape grows

    PDF 1.59 MB