Opportunities in Brazil: Petrobras Divestment Program

What E&P Projects will Petrobras Offload by Year-end? (BNamericas)

Brazil’s state oil firm Petrobras is due to complete by the end of 2020 the sale of 109 exploration and production areas.

The sell-offs are part of the company’s US$20-30bn divestment plan focused on reducing participation in onshore and shallow water projects to focus on deepwater E&P. The deadline was imposed by regulator ANP as a way to incentivize the diversification of operators in the country.

The 109 fields on sale are divided into the following 15 packages. The sale of another 61 fields in 10 packages has already been completed.

Ceará Mar: This package includes the Espada, Curimã, Xareu and Atum fields in shallow waters of the Ceará basin. Around 30km off the coast, the areas have 66 producing wells and nine platforms. The fields began producing in the 1980s and have the potential for recovery investments to increase output, such as new wells, workovers, and water injection. The sale process began in 2017.

Fazenda Belém: This package involves two fields (Fazenda Belém and Icapuí) in the onshore Potiguar basin, and the sale was also announced in 2017. Both areas are connected to the Lubnor refinery. According to Petrobras, thee fields produced an average 1,549b/d of oil and 1,240m3/d of natural gas in the year before the sale was launched, but there are opportunities for exploratory upsides.

Sergipe Terra 1: This includes six onshore fields in the Sergipe-Alagoas basin. Together, they delivered 128,9b/d of oil and 6,500m3/d of natural gas in 2016, before they were put up for sale the following year. There are opportunities for exploratory upsides, the NOC says.

Sergipe Terra 2: The onshore Siririzinho, Castanhal and Mato Grosso fields in the Sergipe-Alagoas basin. They delivered 5,682b/d of oil and 36,900m3/d of natural gas in 2016 and have been on sale since September 2017. There are opportunities for exploratory upsides, according to Petrobras.

Sergipe Terra 3: The Riachuelo field is another onshore area in the Sergipe-Alagoas basin with exploration potential. Its output amounted to 2,616b/d of oil and 2,500m3/d of natural gas in 2016 before the divestment started in 2017.

Miranga: The nine onshore fields in Bahia state present an opportunity for companies seeking cash flow generation, the company says. Together, they produced 1,584b/d of oil and 606,000m3/d of natural gas in 2016, before the sale process started in 2017.

Cricaré: The divestment of 27 onshore fields in Espírito Santo state began in 2019. They are connected to the Norte Capixaba port through an oil pipeline. Together, the fields delivered 2,76b/d of oil and 10,300m3/d of natural gas in 2018.

Remanso: This package includes 12 onshore concessions in the Recôncavo basin. No further information has been disclosed.

Rio Ventura: The process to divest these eight fields in Bahia state began last year. They mostly produce light oil with output reaching 1,538b/d and 43,400m3/d of natural gas in 2018. One of the main strengths of the areas is their closeness to sales points.

Recôncavo: This divestment also began in 2019, with 14 onshore fields in Bahia state, of which 12 are held by Petrobras with 100% of the concession. The areas are considered attractive due to their closeness to sales points and infrastructure with 13 production treatment stations. Together, those fields delivered 2,762b/d of oil and 588,100m3/d of natural gas in 2018.

Rio Grande do Norte Mar: The sale of the Ubarana, Cioba, Oeste de Ubarana, Agulha, Pescada and Arabaiana fields in shallow waters of the Potiguar basin began in 2017. The areas started producing in the 1980s and now have 54 wells and 25 platforms, including production export pipelines and water import lines. Petrobras has started implementing a water injection project in the Ubarana field.

Merluza: The Lagosta and Merluza fields are in shallow waters of the Santos basin. The areas started producing at the beginning of the 1990s and delivered 5,812boe/d during the first half of 2017 before the divestment process began in July that year. Infrastructure includes three drilled wells, one platform and a pipeline connected to the Presidente Bernardes refinery in São Paulo state.

Carapanaúba/ Cupiúba: The sale of these two onshore fields in Amazonas state began in 2019. The areas produce mainly natural gas, with output of 82,200m3/d in 2018. There are opportunities not only for exploration but also to optimize the infrastructure of the fields, Petrobras says.

Garoupa: This package includes 11 shallow water fields in the Campos basin that are among Brazil’s oldest producing areas, with output starting in the 1970s. The areas have 42 wells and six platforms, in addition to an oil pipeline. According to Petrobras, there are opportunities for production recovery investments to enhance output.

Peroá/Cangoá: This package includes the Peroá and Cangoá fields and the Malombe discovery, all in shallow waters of the Espírito Santo basin. The two fields began producing in 2006 and 2009, respectively, and have seven wells connected to a platform, in addition to a pipeline connected to gas treatment unit Cacimbas. The Malombe discovery was made in 2011 and is currently under appraisal.

Petrobras Reports Fresh Pre-salt Discoveries (BNamericas)

Brazil’s state oil firm Petrobras announced two new pre-salt offshore discoveries on Monday.

The firm said it found “great quality” oil through the 9-BUZ-39DA-RJS well in the Búzios field of the Santos basin, considered one of the largest fields in the world. The well continues to be drilled, but an oil column of at least 208m has been confirmed through tests at a depth of below 5,400m, according to a statement.

The firm also found a 214m light oil column through the 9-AB-135D-RJS well in the pre-salt area of the Albacora field, in the Campos basin. The discovery was confirmed through tests at a depth of below 4,630m, the company said. The Albacora field has been producing from post-salt reservoirs since 1987, but Petrobras is now making an appraisal plan to see if accessing pre-salt reservoirs in the area is also feasible.

Petrobras owns the Búzios field under the transfer-of-rights contract, but surplus volumes were auctioned last year, of which the state company will retain 90%, while 10% will be equally divided between China's CNOOC and CNODC. The Brazilian firm operates Albacora without partners.

Last month, Petrobras announced two discoveries in the Campos and Santos basins’ pre-salt regions, on the Uirapuru and Sudoeste de Tartaruga Verde blocks. The discoveries come as the firm focuses on deepwater exploration and production.

The company is currently holding a US$20-30bn asset sale program in order to reduce its participation in downstream, midstream, onshore and shallow water assets.

[show_profile name='Pedro' surname='Rufino Carvalho' jobtitle='Partner' phone=' +44 20 7466 7569']

[show_profile name='Edward' surname='Dougherty' jobtitle='Partner' phone=' +1 917 542 7806']