Petrobras nears deal to revive one of Brazil’s most important oil fields

(Bloomberg) Petrobras is nearing a deal with Brazil regulators allowing it to move forward with plans to redevelop the massive Tupi oil field that could reinvigorate the country’s stalled production, the company’s head of exploration and production Sylvia dos Anjos told Bloomberg on Friday.

The company expects to resolve a long-running tax dispute with regulator ANP by year-end 2024 that would allow it to proceed with a plan to drill new wells and carry out new seismic research at the deepwater field in the Atlantic off Brazil’s southeast coast, dos Anjos said in an interview, adding that it is also considering adding another floating production vessel for Tupi.

Petrobras (PBR) needs to resolve a tax battle with the ANP before it can extend the operating contract at Tupi for another 27 years, or into 2064, a necessary step to justify the substantial spending the company plans for Tupi as it seeks to halt the field’s natural decline.

Brazil tax rates are higher for larger oil fields, and Petrobras (PBR) contends that Tupi actually is two separate deposits, while ANP argues it is a single field; the company has started arbitration proceedings, and both parties now appear willing to negotiate a deal.

Dos Anjos said Petrobras (PBR) has agreed to stop the arbitration but is waiting for Tupi partners Shell and Galp Energia to approve the move.