Oil & Gas - Energy - Commodities - Resources (OILBRENT)

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$TOT Total (TOT -0.9%) boosts its Brazil oil production following the conclusion of a $1.95B deal with Petrobras (PBR +1.9%) that distinguishes the French company as the first private sector operator of a producing sub-salt field.

Yesterday's transfer of stakes in the Lapa and Lara area sub-salt fields in the Santos basin, part of a broader strategic alliance between the two companies, should increase TOT's share of production from just 300 bbl/day in November to more than 25K in Q1 2018, according to data from oil regulator ANP.

TOT has assumed a 35% operating stake in Lapa from PBR, which retains a 10% working stake while Royal Dutch Shell holds a 30% stake and Sino-Spanish JV Repsol-Sinopec 25%.

TOT's output also will come from the 3.3B-barrel Mero field, the first commercial discovery in the Libra sub-salt project, which is expected to produce ~40K bbl/day starting in February; TOT owns a 20% stake in Libra, while PBR holds a 40% operating interest, Shell has 20% and and China's Cnooc and CNPC each hold 10%.

Separately, TOT reports a Q4 average global realized gas price of $4.23/MMBtu, a two-year high, as cold weather in the U.S., Europe and northeast Asia triggered increased demand and higher wholesale prices.

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