Maersk Oil Writes Off $1.7bn of Brazilian Assets
London, July 11, 2014 AEST (ABN Newswire) - // RGN // Maersk Oil, a wholly owned subsidiary of Copenhagen's AP Moller-Maersk AS, has decided to write off US$1.7 billion of investments in the Wahoo and Itaipu oil fields, while divesting its ownership in the Polvo field.
Increased development costs, lower oil prices and lower-value assessments for the Brazil-based fields than expected all factored into the decision.
Maersk will sell its 40% stake in Polvo to independent Brazilian company HRT O&G Exploracao e Producao de Petroleo Ltda. for an undisclosed sum.
The three Campos-basin oil fields were acquired by Maersk in 2011 from South Korea's SK Energy Co. Ltd. for $2.4 billion, "at a time when the outlook for the oil industry and oil prices were more positive than today," said Maersk Group CEO Nils S. Andersen.
"We have now adapted our strategy to the situation we see today, but it is of course clearly unsatisfactory that the oil volumes in the acquired fields Itaipu and Wahoo after appraisal drilling has proved to be in the low end of our original expectations," he added.
Maersk says it will no longer pursue growth or operatorship for its business in Brazil, but that this will have no effect on its long-term production plans.
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