Petrobras Campos Basin aging wells targeted
By Tatiana Bautzer and Marta Nogueira
RIO DE JANEIRO, Oct. 4 (Reuters) – Petróleo Brasileiro SA and Norway’s Statoil ASA are expanding an existing partnership to help the Brazilian state-controlled company arrest declining production at aging wells in the offshore Campos Basin, two people with direct knowledge of the plan said.
In late August, Petrobras and Statoil signed a memorandum of understanding that has since evolved to targeting aging wells. Both firms are discussing under which terms Statoil could get stakes in some fields in exchange for fresh investment and technological cooperation, the people said.
Press representatives for Petrobras did not have a comment. The sources asked not to be identified because the talks remain private.
However, in an emailed statement to Reuters, Oslo-based Statoil acknowledged the plan, adding that it is too early to elaborate on the evolution of the talks.
The decision underscores steps by Chief Executive Officer Pedro Parente to rationalize capital spending at Petrobras, and cope with the impact of low oil prices and a sweeping corruption scandal involving the company.
The Campos Basin, which was responsible for about 85 percent of Brazil’s oil output five years ago, accounts now for 58 percent. Petrobras produces about 80 percent of Brazil’s oil and is responsible for developing massive offshore oil finds in a region known as the Subsalt Polygon, which first produced oil in 2008.
The move comes two months after Statoil agreed to pay $2.5 billion for a 66 percent stake in Carcará, one of Petrobras’ largest oil and gas prospects. Recently, the companies signed a deal in which they said would collaborate on existing fields in Brazil’s Campos and Santos Basins.
The Subsalt Polygon is an offshore region near the coast of Rio de Janeiro, where several of the world’s largest recent oil discoveries have been made.
Last month, Petrobras cut planned investments for the 2017-2021 period by 25 per cent in a drive to reduce the largest debt burden among global oil producers, at $130 billion, and revive investor confidence battered by years of over spending.
Capital spending plans for existing Campos Basin wells suffered the most with the cuts, one of the people said.
The 2017-2021 business plan lowered the estimate for the rate of decline of production in the Campos Basin to 9 percent a year. Petrobras had a prior estimate of a decline between 12 per cent and 15 per cent.
The plan included the need for production partnerships in the Campos Basin, especially to revive output in the basin’s Marlim field.
(Writing and additional reporting by Guillermo Parra-Bernal; Editing by Bernrard Orr)