Azevedo & Travassos, the first private company to produce oil in Brazil, is preparing to return to production and have 1st oil still in 2023

With a pioneering history and a well-defined strategic focus, Azevedo & Travassos is positioned to face the challenges and take advantage of the opportunities in the oil and gas sector.

The renowned contractor Azevedo & Travassos (A&T) is preparing to make a remarkable return to the oil and gas sector, planning to return to oil production until the end of this year. The announcement was made by the chairman of the board of directors of the company, Gabriel Freire, during an event for investors held on Tuesday night in the city of São Paulo. A&T's re-entry into the segment may involve a follow-on offering or a capital increase to finance promising activities.

See: Azevedo & Travassos becomes the first private company to explore for oil

Traditional contractor seeks to resume activities in the oil and gas sector with ambitious strategy

With a history that dates back to its initial public offering (IPO) in 1984, Azevedo & Travassos has had a remarkable trajectory in the oil sector, becoming the first private company to produce oil in Brazil.

However, more than two decades ago, the company had left the productive sector.

Now, with the creation of a new subsidiary called Azevedo e Travassos Petróleo (ATP), the company plans to resume its activities in the oil and gas business.

While avoiding providing specific projections about the company's production, Freire expressed his confidence that A&T will resume production later this year.

The company's initial strategy encompasses the consolidation of micro and small producers of mature land fields, particularly in the Northeast region.

Through strategic acquisitions and partnerships, the company aims to expand its presence in the market and participate in tenders for exploration of mature onshore wells currently owned by Petrobras.

When questioned about the necessary financing for an operation that demands intensive investments, Freire highlighted the possibility of a “follow-on” or capital increase, given the nature of A&T's publicly traded company.

He stated that the company is in the process of quantifying the required investments, thus outlining the company's next steps.

During the event, the presence of investor Nelson Tanure, holder of a relevant stake in the oil company Prio, generated speculation about a possible collaboration between the two companies.

However, Freire clarified that there are no ongoing negotiations to make Tanure an investor in Azevedo & Travassos.

The chairman described Tanure as a “mentor” and “great inspirer” of the project, highlighting his positive influence.

Azevedo & Travassos shares operate higher after announcement of return to oil production

Shares in Azevedo & Travassos rose significantly by around 13% on the B3, the Brazilian stock exchange, the day after the announcement.

Freire expressed his optimistic vision for the new venture, stating that ATP has the potential to be “much bigger” than Azevedo & Travassos itself.

With a turnover of approximately 480 million reais last year and a growing revenue that reached 330 million reais in the first half of 2023 alone.

The company is prepared to seek opportunities for acquisitions and partnerships that strengthen its position in the market.

Freire also highlighted the role of ATP's sister company, Heftos, which provides maintenance and decommissioning services for mature oil wells.

Through Heftos, A&T identified partnership and investment opportunities in mature wells, responding to the growing demand for increased productivity in this sector.

Freire noted Petrobras' natural tendency to dispose of mature wells, opening doors for A&T to consolidate its presence.

In addition to national ambitions, Azevedo & Travassos is eyeing international opportunities.

Freire revealed that, in a second moment, the company will seek expansion to countries in South America, such as Bolivia, Ecuador and Venezuela, envisioning an even broader expansion in the oil and gas sector in the region.

With a promising future, Azevedo & Travassos is determined to establish its position as a significant player in the oil and gas market.