RIO DE JANEIRO, May 17 (Reuters) - Brazilian oil company PetroRio has agreed to sell its 49 percent stake in Amazon oil and gas exploration blocks in the Solimoes Basin to Russian partner Rosneft for $55 million, a source familiar with talks told Reuters on Sunday.
The deal, which still needs regulatory approval, marks the end of exploration in the Amazon rainforest for PetroRio, formerly known as HRT, which is focusing on mature, oil-producing assets in an effort to cut down exploratory risks.
A year ago PetroRio transferred a controlling interest in the Solimoes blocks to Rosneft, which struck a deal with Brazil’s state-run oil company Petrobras to find ways to sell the natural gas trapped in remote parts of the Amazon.
Exploiting Amazon gas is difficult because of the distance from major population centers and the difficulty of building pipelines in the jungle.
The Solimoes blocks are separated from Manaus, the nearest city, by as much as 900 kilometers of impassable rainforest. The nearest pipeline, owned by Petrobras, was built for its own oil and gas output, adapting offshore pipe-laying techniques.
PetroRio has previously studied commercial alternatives for the blocks with Petrobras including liquefying the natural gas, converting it to gasoline, generating electricity and using it for industrial purposes like fertilizer or aluminum production. (Reporting by Marta Nogueira; Writing by Brad Haynes; Editing by Rosalind Russell)