By Jeff Fick / Platts
RIO DE JANEIRO
Petroleumworld 03 07 2019
Platform operator BW Offshore appeared close to buying its first owned-and-operated oil and natural gas production asset, agreeing earlier this week to buy 100% of the undeveloped Maromba Field in Brazil's offshore Campos Basin from state-led producer Petrobras and its US-based partner, Chevron.
BW Offshore will buy Petrobras' 70% operating stake in the field and Chevron's 30% minority stake, the company said Monday in a statement.
"Closing of the acquisition is subject to board approvals and fulfillment or waiver of preceding conditions," BW Offshore said. BW Offshore, however, has not yet signed a purchase agreement with Petrobras and Chevron, the company said.
The antitrust division of Brazil's Justice Ministry, CADE, approved the deal in a decision published in the country's Federal Register Wednesday. BW Offshore's purchase was approved "without restrictions," CADE said.
Despite publication of the decision by antitrust authorities, Petrobras and Chevron haven't yet confirmed the sale. Chevron didn't immediately respond to comment about the sale and Petrobras declined to comment.
The purchase, if completed, would mark the entry of another player with a focus on developing smaller production assets in Brazil's offshore space, an area that has fallen out of favor with Petrobras and other big players that have shifted focus toward the country's massive subsalt play. Petrobras currently has more than 100 onshore and offshore mature fields and other production assets on the sales block, which Brazil's government and leading regulators, such as the National Petroleum Agency, see as an opportunity to lure investments.
Brazil sees revitalization of mature fields and development of smaller, already discovered oil and gas reservoirs as an easy way to boost the country's crude output and average recovery rate of 24%, which lags the industry standard of 30%-35%.
The Maromba deal represents BW Offshore's shift from a pure service provider operating ships, platforms and floating production, storage and offloading vessels toward a full-fledged field operator, industry officials say. The company previously attempted to buy a 30% stake in the offshore Polvo Field in 2014 in a deal that eventually was closed by independent local producer Petro Rio.
In Brazil, BW Offshore currently operates the FPSO Polvo, which handles output from the 100% Petro Rio-owned Polvo Field. BW Offshore also operates the FPSO Cidade de Sao Vicente, which will carry out long-term well tests at subsalt fields for Petrobras until 2020. The company has a fleet of 15 owned-and-operated FPSOs worldwide.
Petrobras, meanwhile, continues its relentless march to reduce the company's bloated portfolio, especially of underperforming mature assets. Petrobras expects to sell $26.9 billion worth of assets in 2019-2023, with the cash from the sales used to finance subsalt development. The sale of Maromba was one of seven sales listed in the binding phase of negotiations when Petrobras released its fourth-quarter 2018 financial statement February 28.
Chevron also continued efforts to shed less-productive assets offshore Brazil. Petrobras and Chevron, which have partnerships on several production fields as well as exploration acreage, recently agreed to sell 100% of the Chevron-operated offshore Frade Field to Petro Rio. Chevron wants to focus on higher-potential prospects in deep-water and ultra-deepwater acreage bought at recent concession bid rounds and production-sharing auctions, industry officials say.
Maromba was declared commercially viable for development in December 2006, the largest of eight declarations in the Campos Basin holding estimated recoverable reserves of 1.37 billion barrels of oil equivalent, Petrobras said at the time. But the field was never developed.
Petrobras had expected to pump the first barrels of 16 API heavy oil from the field in 2019, according to initial development plans. Production was expected by a single FPSO capable of pumping about 60,000 b/d, Petrobras said. The deposit contains mostly oil, with gas content at about 5%, according to Petrobras.
Maromba contains four major reservoirs -- Lobo, Castor, Dingo and Chinchila, Petrobras said. The field is sandwiched between the Equinor-operated Peregrino Field, the shuttered Tubarao Azul Field owned by troubled Dommo Energia and the Petrobras-Chevron owned Papa-Terra Field.
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Story by Jeff Fick from Platts / SPGlobal.
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