October 24, 2016 / 8:07 PM / 2 years ago

UPDATE 1-Petrobras, Total team up for Brazil exploration, power projects

RIO DE JANEIRO, Oct 24 (Reuters) - The chief executives of Brazil’s Petroleo Brasileiro SA and France’s Total SA said on Monday they plan to team up in new exploration, distribution and power projects in Brazil and abroad.

A strategic alliance signed in Rio by CEOs Pedro Parente and Patrick Pouyanné will focus initially on potential natural gas and electric energy projects in Brazil.

But both executives said increased cooperation between the companies could extend to some of Brazil’s refineries and fuel distribution market, as well as international projects.

Pouyanné said Petrobras’ natural gas-fired thermoelectric plants and other assets in the power sector that are up for sale were of particular interest to the French oil major.

He said Total would be able to bring its financing prowess to help get new joint projects off the ground in Brazil, which is suffering its worst economic contraction in eight decades.

Petrobras’ Parente said the accord with Total would give investors greater confidence about the Brazilian oil company’s ability to execute future plans, at the same time that it tries to reduce its hefty debt load and work itself out of a massive corruption scandal that it is at the center of.

Petrobras and Total are already working together in 15 exploration and production ventures worldwide, said the companies, nine of which are in Brazil and six abroad.

The companies are partners in the development of the giant Libra area in Brazil, the first production sharing contract in the Brazilian sub-salt area. They are also partners in the Chinook field in the U.S. Gulf of Mexico.

Reporting by Anthony Boadle in Brasilia and Jeb Blount in Rio; Writing by Reese Ewing; Editing by Chizu Nomiyama and Tom Brown

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