Bloomberg – 05/10/2024 06h15
Petrobras plans new seismic surveys, wells, and a platform for Tupi, but first needs to resolve a dispute with the ANP
Petrobras (PETR3; PETR4) believes it is close to reaching an agreement with the industry regulator, which will allow it to advance with plans to revitalise a massive deepwater field that could rejuvenate the country’s oil production.
The state-owned company hopes to resolve a long-standing tax dispute with the National Agency of Petroleum, Natural Gas, and Biofuels (ANP) by the end of 2024, said the company’s Executive Director of Exploration and Production, Sylvia dos Anjos, in an interview.
An agreement with the ANP will enable Petrobras to proceed with its plan to drill new wells and conduct new seismic surveys in the Tupi field, in the Santos Basin, she said, describing the field as Petrobras’ ‘cash cow’.
The company is also considering adding another FPSO-type platform vessel to the field, according to the Executive Manager for Ultra-Deep Waters, Cesar Cunha de Souza. These platforms can cost up to $4 billion and take years to build.
‘We hope to resolve this liability by the end of this year’, said Anjos.
The Tupi field has been extremely significant for Petrobras and Brazil. It made the country one of the top ten oil producers in the world in the 2010s and generated hundreds of billions of dollars in tax revenues.
The field prompted other major oil companies to spend billions exploring the so-called pre-salt region, an effort that continues to this day.
In 2023, the Tupi field alone surpassed the oil production of countries such as Colombia, Venezuela, the United Kingdom, and Argentina.
Petrobras is seeking to halt the natural decline in Tupi. Oil-producing countries around the world face similar challenges, which could lead to economic shocks.
Mexico’s oil production went into freefall after the massive offshore Cantarell field peaked in the 2000s, removing a key source of government revenue. ‘We’re going to undertake a process to extract much more from Tupi’, said Anjos. ‘It’s a giant field.’
Planning
The start date for the operation of the new production unit in Tupi is expected to be adjusted in the next strategic plan, according to Souza.
Petrobras plans to launch a campaign to install additional wells to improve extraction rates from a field that has already seen more than a decade of production, he added.
Petrobras needs to resolve its dispute with the ANP before it can extend the operation contract for Tupi by another 27 years, until 2064. This is a necessary step to justify all the investments in the new development plan the company is preparing for the field.
In Brazil, financial compensations for oil and gas production are higher for larger fields, and Petrobras claims that Tupi is actually composed of two separate reservoirs—Tupi and Cernambi—while the ANP argues it is a single field.
Petrobras initiated an arbitration process, and both parties are willing to negotiate a settlement. Petrobras and its partners in Tupi have a total of R$ 14 billion in court deposits for alleged unpaid special participation taxes, as a result of the dispute with the regulator, according to ANP data. The consortium has contested the amount and has been seeking to reduce it.
Anjos stated that Petrobras agreed to suspend the arbitration process but is waiting for approval from Shell and Galp Energia SGPS, which hold 25% and 10% stakes in the field, respectively. Both companies have declined to comment. Tupi was Brazil’s first oil field to begin production in the so-called offshore pre-salt area—so named because of the thick salt layers above the crude oil.
Petrobras discovered a cluster of giant ultra-deepwater fields, which now account for around 80% of Brazil’s oil production.
Tupi alone produced an average of 764,000 barrels of oil per day in the first eight months of 2024, still surpassing Búzios, the field Petrobras is betting on to expand its production.
The daily crude oil production at Tupi returned to last year’s levels in August, reaching 830,000 barrels per day following the completion of planned maintenance on a platform.
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Source: InfoMoney / BR8
