3R Petroleum to approach global trading companies about partnerships in the Potiguar Cluster

(epbr) 3R Petroleum is approaching global trading companies interested in joining the Potiguar Cluster as partners. The company intends to deepen the studies on the financial evaluation of the cluster’s infrastructure assets, before taking a decision on a potential partnership.

In January, the company signed a contract with Petrobras, in the amount of US$ 1.38 billion, for the acquisition of 100% of the asset. The Potiguar Cluster brings together 22 fields in production and the associated infrastructure — which includes the pipeline systems, the natural gas processing units (UPGNs) in Guamaré (RN), the Clara Camarão refinery and the Guamaré Waterway Terminal.

3R’s CFO, Rodrigo Pizarro, highlights that the Potiguar’s infrastructure has a storage capacity of 1.8 million barrels and will allow the company to potentially export around 90% of its oil production in the future.

According to the executive, it is natural that an asset of this type arouses the interest of global trading companies. Pizarro says that companies have been looking for the oil company, interested in both commercial partnerships – with an eye on contracts for the acquisition of oil – and strategic partnerships, capital.

3R expects the acquisition of the Potiguar Complex to be completed between March and April 2023.

The director said that, for now, the company is still “far from an equity [capital] partnership”, but that it has hired an international consultancy to deepen the valuation studies of the midstream and downstream assets of the Potiguar Cluster, to guide the decision on a possible future partnership.

“When 3R evaluated the Potiguar Complex, we did a typical analysis of upstream assets, and when we did the downstream and midstream analysis, we made a conservative assessment. In fact, the more we evaluate and discuss with eventual partners, we see that we have potential good upsides in the assets to make possible an eventual equity partnership”, commented the executive during a conference call with analysts and investors.

Drilling in Macau

3R produced, in the first quarter, around 7,600 barrels/day of oil. The volumes come basically from the Macau (RN) hubs, the company’s main operating asset, and Rio Ventura (BA).

The company expects to start drilling wells in the asset revitalization plan in 2022, with a focus, above all, on Macau. According to Pizarro, the program is in the order of magnitude of six to 12 wells and should probably start in the fourth quarter.

The oil company’s expectation is that the drilling will help increase the production recovery factor.

3R also expects, in 30 days, to start operating its new oil-water separation plant in the Potiguar Basin. The facility is in the commissioning phase and will allow the company to carry out secondary recovery in mature fields and reduce fluid pumping costs.

In addition to the Macau and Fazenda Belém operations, 3R should add new assets to its operational portfolio in the coming months. The company expects to complete other important acquisitions of Petrobras assets in three months, such as the Recôncavo (Recôncavo Basin), Fazenda Belém (Potiguar Basin) and Peroá (in the Espírito Santo Basin offshore) clusters. Next, the oil company also expects to take over Papa-Terra, in the Campos Basin.

3R sells gas to Petrobras

Macau’s natural gas is being sold to Petrobras, which still operates the UPGN in Guamaré, at around US$6 a million BTU. The company managed to increase the price of the molecule by eight times in the first quarter, compared to the same period last year, after a contractual renegotiation with the state-owned company in December.

Pizarro says that the company is evaluating other opportunities to monetize the gas from its fields and that it has conversations with distributors in Espírito Santo (ESGás) and Bahia (Bahiagás), in the search for contractual improvements.

He explains, however, that the company’s gas monetization strategy involves not only the value of the molecule, but other contractual conditions, such as the degree of flexibility in the offer and penalties.

The executive mentions that the contract for the sale of gas to Petrobras, for example, is flexible. One of the differentials is that there are no large penalties for eventual declines in production.

“We are evaluating other opportunities. Perhaps we will achieve [in other contracts] better rates, but with more penalties for eventual production stoppages,” he said.

Pizarro also mentioned that there are no expectations of large surpluses of gas, available for commercialization, in the Potiguar Cluster — unless new reserves are discovered in the exploratory areas acquired near the asset.

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