Nov 5, 2019
PetroRio expects to reduce its extraction cost to $ 20 a barrel by December. The company closed the third quarter of 2019 at a cost of $ 22.9 a barrel, compared with $ 24 in the second quarter.
According to the Brazilian oil company, the reduction of extraction costs was made possible by renegotiating operating contracts and capturing synergies between the Polvo and Frade fields, both in the Campos Basin.
PetroRio expects to start the Frade field revitalization project between 2020 and 2021, said Francilmar Fernandes, the company’s director of operations.
The first phase of drilling is expected to cost the consortium $ 190 million to $ 200 million. Frade is operated by PetroRio (70%), in partnership with Petrobras (30%).
Frade’s drilling campaign will be divided into two phases. The first includes a producing well and two injectors; the second, three producing wells and a gun.
The company’s chief financial officer, Roberto Monteiro, said the campaign should start in the second half of 2020, and that PetroRio is “working hard” to fund the project.
“We have already designed this campaign and obviously we have started talking to some suppliers, but with no formal request so far,” he said in the conference call with investors to comment on the company’s performance in the third quarter, announced last Thursday (31).
Monteiro said the company is looking out for new asset acquisition opportunities. According to him, there are many opportunities in the market and the company has been working on “various possibilities”.
“Our [acquisition] pipeline has never been so big. In addition to Petrobras’ divestment process, we are seeing other companies in the sector taking advantage of this interesting Brazil moment. The majors [major global oil companies] have been reshaping their portfolios and divesting from fields that were unthinkable in the past, ”he said.
Monteiro also commented on the financing strategy of possible new acquisitions. According to him, the tendency is not to resort to long-term pre-acquisition financing. The idea is to repeat the model of buying Frade.
“It’s more interesting to use own resources and financing over [the cash] of some existing asset to make an acquisition. In Frade, for example, we funded using the Polvo field, ”he said.
Asked about PetroRio’s plans to issue bonds in Norway, Monteiro said the prospectus is well advanced. “We are waiting for the right moment,” he said.