Brazil’s Petrobras pushes ahead with onshore field sales

Must Read

OilNOW is an online-based Information and Resource Centre

(S&P Global Platts) Brazilian state-led oil company Petrobras completed the sale of onshore oil fields in the Potiguar Basin and put several exploration blocks in the Reconcavo Basin up for sale as the company continued to shed onshore assets to focus on the more lucrative subsalt region.

The asset sales are part of a wider $26.9 billion divestment program for 2019-2023 that will see Petrobras dramatically reduce its participation in mature onshore and offshore basins as well as end the company’s long-held monopolies in refining, fuels distribution and natural gas distribution. Brazil wants to use the asset sales to attract new players and boost output from mature onshore and offshore regions.

Petrobras has more than 100 onshore and offshore fields and exploration concessions up for sale.

The government’s efforts appear to be working as onshore divestments have accelerated over the past 18 months, buoyed by regulatory changes enacted by Brazil’s National Petroleum Agency, or ANP, and the Mines and Energy Ministry. Petrobras also has until the end of 2019 to complete sales or return many mature fields and inactive areas to the ANP, where the regulator plans to include the assets in the Open Acreage program.

Petrobras agreed to sell the Ponta do Mel and Redonda fields to Central Resources do Brasil Producao de Petroleo for $7.2 million, the company said in a filing with stock regulators submitted after markets closed late Monday. The fields are in the Potiguar Basin in Rio Grande do Norte state, which is a traditional onshore production area in Brazil.

The two fields, which produced an average of 540 b/d in the first half of 2019, were part of the country’s first risk contracts made during Brazil’s initial efforts to open up the domestic oil industry in the 1980s. Central Resources assumed exploration risks related to the fields, which were discovered in 1984 and 1987, with Petrobras taking a financial stake in the fields after the discoveries.

Central Resources holds onshore oil and gas exploration and production assets in Rio Grande do Norte and Espirito Santo states.

Petrobras also put eight exploration and production concessions in the onshore Reconcavo Basin up for sale, the company said in investment teasers released late Monday.

The blocks put up for sale are the REC-T-32, REC-T-40, REC-T-50, REC-T-51, REC-T-52, REC-T-60, REC-T-61 and REC-T-70 exploration and production concessions, which were all obtained during Brazil’s 12th bid round held in 2013. Petrobras owns 100% of the blocks.

The ANP recently granted oil companies the right to return concessions obtained during the 12th bid round, which was focused on developing the country’s onshore gas and unconventional deposits. Lawsuits aimed at stopping the use of hydraulic fracturing amid environmental concerns, however, blocked development of many areas.

Oil companies were allowed to return the 12th-round blocks and exempted from completing minimum exploration requirements but will not be reimbursed for work already completed or the signing bonuses that were paid at the time of the bid round, the ANP said.

Petrobras committed to drill at least one well in each block during the second exploration phase, according to the company.

The blocks are in a traditional area for onshore oil production and are close to existing output and related infrastructure, Petrobras said. The company also recently completed new 3D surveys.

Potential investors have until October 10 to inform Petrobras of their possible interest, with an October 18 deadline set for submitting confidentiality and qualification documents, according to the teaser. Bids will be accepted on a per-block basis, Petrobras said.

In a separate statement, Petrobras said it had signed an agreement with Uruguay to end the company’s participation in Distribuidora de Gas de Montevideo and Conecta. Petrobras’ shares in the two companies were transferred to the Uruguayan government, the company said.


Partnered Events

Latest News

Peking University Emerges Victorious in 2024 ASC Student Supercomputer Challenge Finals

BEIJING--(BUSINESS WIRE)--#ASC--On April 13, 2024, the 2024 ASC Student Supercomputer Challenge (ASC24) Finals drew to a close at Shanghai...

More Articles Like This