Petrobras formed a strategic alliance with French giant Total for work on oil and gas projects. The two companies signed Memorandum of Understanding, which involve them on undertakings of mutual interest in development and operations of offshore fields in Brazil and Latin America, as well as downstream gas and power sales in Brazil. The both companies have strong experience in deep-water drilling, but joining forces will maximize the expertise and optimize the revenues from extraction of offshore oil and gas. The agreement for join activities foresees activities in exploration projects, including in the presale, deep-ocean drilling off Brazil.

“This is the first strategic alliance between the two groups”, said Total in official statement. “This is a far greater level of cooperation between Total and Petrobras than you usually get in the oil industry. This isn’t an alliance that will focus on one particular project”, adds the statement.

The Memorandum of Understanding for formation of the new strategic oil and gas alliance was signed by Patrick Pouyanne (CEO of Total) and Pedro Parente (CEO of Petrobras).

“We are enthusiastic to have the opportunity to develop our existing relationships with Petrobras both in upstream and downstream and look forward to materialize this strategic alliance in coming months with new ventures both in Brazil and internationally”, commented the CEO of Total, Patrick Pouyanne.

In a down oil market with exploration and development of new oil reserves becoming increasingly costly, a partnership like this could soften the pain of finding new reserves. For Petrobras, this is a fresh breath after serious financial and debt problems, caused by giant corruption scandal and low oil prices. For Total SA, the strategic alliance offers a shot at the massive oil deposits off the shore of Brazil.