The fully owned subsidiary of A.P. Møller – Maersk, Maersk Olie og Gas (Maersk Oil) is revising its strategy and will no longer pursue growth or operatorship for its business in Brazil. Because of this, Maersk Oil has divested its ownership share in the small producing field Polvo to the operator, Brazilian independent HRT O&G Exploracao e Producao de Petroleo, subject to regulatory approvals. The remaining fields Wahoo and Itaipu contain significant potential resources and it is expected that the operating partners of these fields will be able to present commercially viable development plans at a later state. Maersk Oil had acquired stakes in these three Brazilian blocks from SK Energy for USD 2.4B in July 2011.
Based on its assessments, Maersk Oil expects that these plans will result in a lower value than originally anticipated as the appraisal drillings performed have come out at the low end of the original expectations and additional adverse impacts from increased development costs and lower oil price also must be expected. Consequently, the company has decided to make an impairment to the book value of Maersk Oil’s Brazilian assets of USD 1.7B, bringing down the value to USD 0.6B which will be included in the Group’s Q2 result.
