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With a History of Pioneering and a Well-Defined Strategic Focus, Azevedo & Travassos Positions Itself to Face Challenges and Seize Opportunities in the Oil and Gas Sector.
The renowned contractor Azevedo & Travassos (A&T) is preparing for a remarkable return to the oil and gas sector, planning to resume oil production by the end of this year. The announcement was made by the company’s board chairman, Gabriel Freire, during an investor event held on Tuesday night in São Paulo. A&T’s reentry into the segment may involve a subsequent share offering (“follow-on”) or a capital increase to finance promising activities.
See: Azevedo & Travassos Enters as the First Private Company to Explore Oil
Traditional Contractor Aims to Resume Activities in the Oil and Gas Sector with Ambitious Strategy
With a history dating 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, for over two decades, the company had exited the production sector.
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Now, with the creation of a new subsidiary named Azevedo e Travassos Petróleo (ATP), the company plans to resume its activities in the oil and gas field.
While avoiding providing specific projections about the company’s production, Freire expressed confidence that A&T would resume production this year.
The company’s initial strategy includes consolidating micro and small producers of mature onshore fields, particularly in the Northeast region.
Through strategic acquisitions and partnerships, the company aims to increase its market presence and participate in bids for mature onshore wells currently owned by Petrobras.
When questioned about the financing needed for an operation that requires intensive investments, Freire highlighted the possibility of a “follow-on” or capital increase, given A&T’s nature as a 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, who holds a significant stake in the oil company Prio, sparked speculation about a possible collaboration between the two companies.
However, Freire clarified that there are no negotiations underway to make Tanure an investor in Azevedo & Travassos.
The chairman described Tanure as a “mentor” and a “great inspirer” of the project, highlighting his positive influence.
Azevedo & Travassos Shares Rise After Announcement of Return to Oil Production
Azevedo & Travassos shares saw a significant increase of about 13% on B3, the Brazilian stock exchange, the day after the announcement.
Freire expressed an optimistic outlook for the new endeavor, stating that ATP has the potential to be “much larger” than Azevedo & Travassos itself.
With a revenue of approximately 480 million reais last year and increasing revenue that reached 330 million reais in just the first half of 2023.
The company is prepared to seek acquisition and partnership opportunities that strengthen its market position.
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 the natural trend of Petrobras to divest mature wells, opening doors for A&T to consolidate its presence.
In addition to national ambitions, Azevedo & Travassos is looking at international opportunities.
Freire revealed that, at a later stage, the company will seek expansion into South American countries 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 mark its position as a significant player in the oil and gas market.
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