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Posted on January 30, 2012
HRT Participacoes em Petroleo SA, Brazil’s fourth-largest oil company by market value, has enough cash to cover investments through 2013 as it accelerates exploration in the Amazon and off the coast of Namibia.
HRT has started drilling a third well in the Solimoes Basin in the Amazon and will approve its budget and drilling plan for this year in two to three weeks, Chief Executive Officer Marcio Mello said in a telephone interview from Rio de Janeiro today. HRT, based in Rio, has about $400 million in cash now, he said.
“We are funded for the next two years,” Mello said. “We are not going to the bank in 2013.”
TNK-BP, Russia’s third-largest oil producer, agreed in October to pay $1 billion for a 45 percent stake in HRT’s Solimoes block, with an option for an additional 10 percent. Under an amendment dated Jan. 27, HRT will pay exploration expenses incurred during 2011 and pay for the first $175 million of investments this year.
As compensation, TNK-BP agreed to pay HRT $250 million when it completes “milestones,” including an accumulated production of 2.5 million barrels.
“It will be easy, these milestones are incentives for us to speed up performance,” Mello said. “It didn’t change much, they already gave me the money, the letter of credit is with me.”
HRT rose 2.8 percent to close at 473 reais in Sao Paulo.
To contact the reporter on this story: Peter Millard in Rio de Janeiro at firstname.lastname@example.org
To contact the editor responsible for this story: Dale Crofts at email@example.com