BP (NYSE: BP) officials announced Tuesday it's been approved to explore for oil off the coast of Brazil's equatorial waters.
The British oil company will be partnering with Brazil's state-owned Petrobras and hold a 40 percent interest in four exploration blocks. Combined, BP will explore in more than 800 square miles of ocean, the company said.
BP is building on our strengths in exploration and the deepwater and these four new blocks bring exciting new exploration opportunities, adding to the already significant position we hold in Brazil, said Bob Dudley, BP group chief executive, in a statement. I am pleased that this also deepens our strong relationship with Petrobras, one of the world's leading deepwater operators.
The company is entering an area which has so far failed to produce commercially viable amounts of crude, said Brazil's petroleum authority, ANP.
Out of 105 exploration wells drilled in the Barreirinhas Basin, which holds a stake in two of the new blocks, three wells have produced hydrocarbons. Most was natural gas.
This exploration effort resulted up to now in the sub-commercial discoveries, ANP said.
Including this most recent concession, BP will have a stake in 14 exploration blocks along Brazil's coast.
In morning trading, BP's American Depositary Recipts fell 2.58 percent to $46.72.