Brazil's state-controlled oil company Petrobras signed production-sharing contracts on Thursday (Sept. 17) for eight offshore exploration blocks in Ivory Coast, in West Africa. The deals were signed through its subsidiary Petrobras Netherlands B.V. (PNBV) with the Ivorian government and the local state oil company Petroci Holding, CNN Brasil reported.

Petrobras will hold a 90% stake and operate blocks CI-513, CI-600, CI-601, CI-602, CI-603, CI-605, CI-701 and CI-702. Petroci keeps the remaining 10%.

The company confirmed the deal in a filing to the CVM, Brazil's securities regulator, according to UOL. The signing marks Petrobras's entry into these areas of the African coast. The company said the expansion is part of its strategy of seeking new oil and gas reserves outside Brazil as well.

How the sharing model works

Under a production-sharing regime, the oil extracted is split between the contracting companies and the state that owns the area, in this case the Ivorian government. Petrobras already works under this model in Brazil's pre-salt fields, where the federal government keeps part of the output.

The contracts cover the exploration phase, which comes before any production decision. There is no immediate effect for Brazilian consumers: an eventual discovery would take years to become barrels. For Petrobras and its shareholders, the blocks expand the company's exploration footprint abroad and diversify the source of future reserves, with the Ivorian state company as minority partner.