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Understand Why Petrobras Sold the Asset, the Challenges of Heavy Oil, and the Legal Dispute That Became the Biggest Obstacle for the New Owner to Unlock the Field’s Potential
One of the most challenging projects in deep waters in Brazil, the Papa-Terra field, in the Campos Basin, has become the center of a complex technical and legal battle. Sold by Petrobras for over 100 million dollars, the asset was taken over by 3R Petroleum with the promise of revitalizing its production and unlocking a billion-dollar value. The new owner, now part of Brava Energia, struggles to overcome the same difficulties that led the state-owned company to divest the project.
3R’s bet is to apply its business model, focused on mature fields, to breathe new life into Papa-Terra. However, the challenge goes beyond complex geology and heavy oil. A fierce dispute with its partner in the project has become the biggest obstacle, leading to a battle in an international arbitration court that will define the future of this giant field that Petrobras sold.
The Sale of the Giant, Why Did Petrobras Divest the Papa-Terra Field?
Petrobras’ decision to sell the Papa-Terra field is part of a broad restructuring of its portfolio. The state-owned company decided to concentrate its investments and efforts on world-class pre-salt assets, which are more profitable. Fields like Papa-Terra, with a history of production below expectations and complex operations, have become non-essential.
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The transaction, valued at a total of US$ 105.6 million, was structured to mitigate risks. 3R Petroleum paid a smaller portion upfront, and the remaining amount was contingent on future production success. The deal was finalized on December 22, 2022, when 3R officially took over the operation of the field.
The Paradox of Papa-Terra, Quality Rock, Hard-to-Extract Oil
The great opportunity and, at the same time, the biggest challenge of Papa-Terra reside in its geology. The field has an estimated original oil volume of 2 billion barrels, contained in excellent quality reservoir rocks. The problem lies in the oil itself.
Classified as heavy, with API gravity between 12° and 17°, it is extremely viscous, making extraction difficult. Because of this, the historical recovery factor of the field is only 2%, well below the average of 16% for the Campos Basin. 3R’s thesis is that, with more focus and investment, it is possible to drastically increase this percentage, extracting millions of barrels that were left behind.
The Plan of 3R Petroleum
3R’s strategy for the Papa-Terra field is not based on new discoveries, but on engineering and efficiency. The revitalization plan focuses on two main fronts. The first is to perform interventions on existing wells (workovers), reactivating idle wells and optimizing those already in production.
The second front is a new drilling campaign to access areas of the reservoir that have not yet been drained. For this, 3R relies on the unique infrastructure inherited from the field, especially the P-61 platform, which has its own drilling rig, making interventions easier and cheaper.
The War Behind the Scenes, the Shareholder Dispute That Threatens the Future of the Field
While the technical battle occurs at the bottom of the sea, an even more complex dispute takes place in the courts. 3R Petroleum (now part of Brava Energia) holds 62.5% of the field, but the other 37.5% belongs to its partner, Nova Técnica Energy (NTE). The relationship between the two has deteriorated, and 3R accuses NTE of not paying its share of costs and investments.
Based on this, 3R attempted to take full control of the asset, but NTE countered, denying the accusations and taking the dispute to an international arbitration court in London. In a significant setback for 3R, CADE (Administrative Council for Economic Defense) dismissed its acquisition request in September 2024 due to procedural errors. This legal impasse has become the greatest threat to the project, as it complicates securing funding for the expensive revitalization plan, leaving the future of the Papa-Terra field in limbo.
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