Defeated in Brazil but Maersk Oil still in the game
Plenty of disappointment in Brazil, after the national football team lost 7-1 to Germany, but also having to admit a certain amount of defeat: Danish company Maersk Oil which has written down the value of its Brazil operation by 1.7 Billion US dollars.
Maersk Oil acquired stakes in three Brazilian blocks from SK Energy for USD 2.4 billion in July 2011. In short, there wasn't any oil or at least not enough to stick with the strategy. Maersk Oil seeks ten percent return on invested capital and the Brazilian fields have been judged to fall below that level of likely return.
The write down was announced this week, shares have risen slightly, CEO of Maersk Oil, Jakob Thomasen said:
"Whilst our ambitions for Brazil have only partly lived up to our expectations, Maersk Oil continues to develop an exciting portfolio of new projects around the world that will deliver more value and increased production through the decade."
Adam Newton, Director of Communications for Maersk Oil explains why the firm took the decision to write down the value of the assets and puts the move in industry context.
