August 3, 2020

Petro Rio S.A., (the “Company” or “PetroRio”) (B3: PRIO3), informs its shareholders and the market in general that, in addition the Material Fact of February 3, 2020, the National Petroleum Agency (“ANP”) granted, on this date, effectiveness to the the amendments to the concession agreement in connection to the rights (“farm-in”) of in the Tubarão Martelo Field (“TBMT”). With this resolution, PetroRio is granted operatorship and an 80% stake in the field.

The acquisition produces significant synergies between Polvo and TBMT, as well as lifting cost reductions, and the extension of the useful life of both fields to 2035.

The farm-in will allow for the tieback between both fields, while simplifying the production system and creating a production cluster in the Campos Basin. The Company estimates that Polvo’s and TBMT’s combined Opex – which in 2019 exceeded US$ 200 million per year (US$ 100 million for Polvo + US$ 100 million for TBMT) – will be reduced to less than US$ 120 million per year, with PetroRio as the cluster’s new operator.  After the tieback, the Company expects operating costs for the cluster to be further reduced to less than US$ 80 million, once all air, sea and land logistics synergies have been captured, and after the decommissioning of the FPSO currently chartered to Polvo.

Leading up to the tieback’s completion in mid-2021, PetroRio will own rights to 80% of TBMT’s oil and will be responsible for 100% of the FPSO’s charter, the Field’s Opex, Capex and abandonment costs. During this phase, the Company will be reimbursed by Dommo at a monthly fee of US$ 840 thousand.

Once the tieback is completed, PetroRio will remain responsible for 100% of the abovementioned costs for the cluster, while Dommo will be relieved of the monthly fees. In this new phase, PetroRio will have the rights to 95% of the oil produced by the Cluster, up to the first 30 million barrels produced post-tieback, and 96% thereafter.

The Company estimates the project’s Capex will reach approximately US$ 45 million, to be disbursed during the first half of 2021. In addition, PetroRio expects to take advantage of the connection of the Polvo Field to the FPSO OSX-3, to make further investments for the connection of the new TBMT-10H-RJS well, which the Company estimates may cost between US$ 20 million and US$ 25 million.

TBMT Field reached its peak production in 2014, with an output of 14,000 barrels of oil per day. From the start of production, Dommo has maintained high levels of operational efficiency, safety and resilience during periods of low Brent prices. The Company believes Dommo will be an important partner when the unified production system is installed and operated by PetroRio.


In June 2020, Dommo Energia announced the return to production of well TBMT-2HP, increasing the field’s total production to approximately 7,000 barrels per day. In the coming weeks, the Company expects the connection of the TMBT-4HP well to be completed.

The Company thanks the PetroRio team for the effort and work put in during this important acquisition.

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