How Brazil's PRIO will double its oil production

Brazilian oil firm PRIO just signed a US$1.9bn deal with SPEP Energy Hong Kong and Sinochem International Oil Company for the acquisition of Sinochem Petroleum Netherlands Coöperatief, which indirectly holds a 40% stake in the Peregrino and Pitangola fields in Brazil’s Campos basin. 

The new consortium will be made up of Equinor, as operator of the field with a 60% stake, and PRIO with 40%. After completion of the acquisition, PRIO's production will increase by around 35,000b/d.

The deal was unveiled shortly after BNamericas spoke with PRIO's CEO, Roberto Monteiro, at last week’s ROG.e conference in Rio de Janeiro. In the interview, the executive also said production from the Wahoo field should begin in the first half of 2025, adding output of 40,000b/d. 

Considering that the company currently produces approximately 80,000b/d, the jump in PRIO's output, with Peregrino and Wahoo, will be nearly 100%. 

In the interview, Monteiro also commented on the company’s operations and the situation of the Albacora Leste, Polvo and Tubarão Martelo fields.

BNamericas: What is the forecast for the start of production of Wahoo? Is it more like 2025 or is there still a chance that it could happen this year?

Monteiro: Definitely 2025, in the first half of the year. We'll have the first oil, starting with production of around 20,000b/d until we reach around 40,000b/d, which should happen in the second half of the year.

It's an investment of more than US$800mn, and a large part of that investment has already been made.

We’re currently waiting for the licenses from [environmental regulator] Ibama. There are two: one for drilling and one for laying the subsea lines, so we can drill the wells and connect them to the Frade FPSO. 

BNamericas: And this will represent an increase in what order for PRIO's production? 

Monteiro: We're currently producing just over 80,000b/d. So, it would practically be an increase of 50%. 

BNamericas: You even produced 100,000b/d last year, right?

Monteiro: Yes, that was the approximate average for the last quarter of 2023. But there is the [natural production] decline, and, in addition, we had four wells that stopped producing. In order for them to start producing again, we need authorization from Ibama. 

BNamericas: How are conditions at FPSO Frade to be able to receive Wahoo's production? 

Monteiro: We’re making investments in the FPSO with a focus on the type of oil rather than the production capacity itself. The oil that will come from Wahoo is lighter and has a lot of gas. So we’re working on the FPSO so that it has the capacity to treat and export this gas. 

BNamericas: What is the situation with the Albacora Leste field, which you acquired from Petrobras?

Monteiro: We have a well-defined roadmap for every asset we buy. We always spend some time operating the asset to gain confidence, improving operational efficiency, working on its integrity and so on. Then we start a revitalization campaign that increases production. At Albacora, I'd say we're maybe close to 70% through with the efficiency improvement phase, with a lot of maintenance. Sometime next year, possibly at the end of the year, we'll start the field revitalization campaign and that's when the production increase comes.

BNamericas: What about the Polvo and Tubarão Martelo fields, what are the prospects?

Monteiro: With regard to Polvo, we still have some opportunities there, although they are marginal. They're opportunities to try and hold off the decline of the field; there won't be any big increases in production. We may be able to add wells with an initial flow rate of 1,000-1,500b/d. These are relatively small wells, but they’re well suited to the field.

Regarding Tubarão Martelo, we have at least two wells to be drilled, two interesting prospects. We have other reservoirs that could be put to work. We probably won't be able to do this next year, but it's on our agenda. 

BNamericas: Do you have plans for decommissioning facilities in the short or medium term?

Monteiro: No. If we look at Tubarão Martelo, which is our least productive asset, we’d be talking about abandonment in 2033, 2035, something like that. And, if we’re successful in some of the opportunities we have there, this timeframe could be extended. 

BNamericas: PRIO is strongly focused on production assets, but it has exploration assets in its portfolio, including in the Equatorial Margin. What are the prospects in this area?

Monteiro: We have blocks in the Equatorial Margin, but these are blocks that we’re gradually returning to [regulator] ANP. In general, they are assets that were part of other transactions. As the concessions expire, we return them to the ANP. New frontiers exploration is not on our agenda, but exploration near the fields is.

BNamericas: Could this eventually involve acquiring blocks through the ANP's open acreage program or M&As? 

Monteiro: Yes, because in these cases I already have my infrastructure ready and I develop projects around it. It's what the Americans call infrastructure-led exploration. That's our footprint, our mindset, and that's what we intend to do.

BNamericas: Can the signing of Potencializa E&P [program] by the federal government make the open acreage program more attractive?

Monteiro: I think so. The mere fact that the government has an eye on E&P already helps.