Prio pursues ambitious agenda with discipline

(U) Brazil’s Prio intends to become one of the largest independent oil and gas companies in the Americas and is counting on more than doubling its production over the next two years to meet that target.

With a solid cash position of $1.2 billion, the company is simultaneously developing a pair of clusters in the Campos basin and producing about 50,000 barrels per day of oil.

However, Prio envisages a day when output will likely reach 130,000 bpd, just from assets under development and the Albacora Leste field that it is in the process of acquiring.

“Regarding Albacora Leste, we are already in the transition period and we expect to take over operatorship of the field by the end of the year,” Prio chief operating officer Francilmar Fernandes says.

Prio agreed earlier this year to buy a 90% stake in Albacora Leste from Petrobras for $2.2 billion. The field is currently producing about 30,000 bpd via the P-50 floating production, storage and offloading vessel.

Prio plans to inject as much money in a big revitalisation programme at Albacora Leste that will include drilling new wells to help develop up to 280 million barrels of oil in recoverable reserves.

“We already have our people on board the FPSO to have a better understanding of the vessel and our initial goal will be to improve the efficiency, integrity and reliability of the entire production system,” Fernandes says.

The Albacora Leste redevelopment calls for the drilling and connection of as many as 12 wells, including three in the pre-salt fairway, in a bid to increase output to more than 50,000 bpd in 2024.

Closer at hand, Prio is injecting cash at its most ambitious project, the Wahoo-Frade joint development.

The company is in the middle of a four-well campaign at Frade aimed at revitalising operations in the field.

The first well, ODP4, was placed on stream in July at a stabilised flow rate of 15,000 bpd, far more than originally anticipated, which according to Fernandes opened up a new frontier play in the deep-water field.

“The well was drilled in a ‘virgin’ area within the field. We hoped to find good quality reservoirs but results surpassed our expectations. We may consider drilling new wells there in the future,” he adds.

Prio is now concluding two water injection wells at Frade to improve the energy of the reservoir and boost its oil recovery factor.

Frade made the headlines in November 2011, when US supermajor Chevron was the field operator.

The company had to suspend water injection at Frade after a powerful kick at a depth of 567 metres below the seabed caused crude to seep from several small cracks in the ocean floor, eventually leading to a spill of nearly 3000 barrels of oil.

Regulator ANP imposed new safety restrictions following the incident, but after buying the asset in 2019, Prio demonstrated the benefits of water injection.

Fernandes says: “We are replacing old vertical injection wells for horizontal ones of more than 1000 metres in length. Our injection capability will improve considerably.”

Three more wells are to be drilled in Frade next year once the reservoir begins to feel the effects of the water injection.

Also in 2023, Prio will start a highly awaited drilling programme at the Wahoo pre-salt accumulation.

Four oil production wells will be drilled and linked via a 30-kilometre subsea tie-back to the Valente FPSO in the Frade field.

Each well is expected to produce at a rate of 10,000 bpd, with first oil from Wahoo scheduled for early 2024.

“We believe we can increase our overall production to 130,000 bpd in 2024 with Frade, Wahoo and Albacora Leste,” Fernandes says.

Prio also plans to drill new wells in the Polvo-Tubarao Martelo shallow-water cluster in the next few years in an attempt to keep output stable at about 20,000 bpd.

While busy revitalising its existing assets, Prio maintains a strong appetite to grow inorganically and is pursuing further acquisitions.

Even though Prio is keen on acquiring more assets, Monteiro stresses the company has capital discipline and will not engage in mergers and acquisitions only to “grow the empire”.

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