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The Brazilian PRIO Acquired a Problematic Oil Field in the Campos Basin, Increased Production by More Than 250%, and Turned It Into Its Most Profitable Asset, a Case Studied in the Market.
The story of the Frade Field, in the Campos Basin, is one of the biggest turnarounds in Brazil’s oil and gas industry. This oil field, which was in decline and had a history of accidents under the American giant Chevron, was sold and turned into a real “money machine” for Brazilian PRIO (former PetroRio).
With an efficient management and targeted investments, PRIO not only revitalized the asset but also multiplied its production and value, proving that specialization in mature assets can yield spectacular results. This is the main success story of a “junior oil” company in Brazil, a business model that was widely highlighted by the specialized press throughout 2024, following the announcement of its record results.
The Frade Field Under Chevron and the Incidents of 2011
The Frade Field, located in deep waters 108 km off the coast of Rio de Janeiro, was once a very important asset for Chevron. In 2011, its production exceeded 70,000 barrels of oil per day. However, everything changed that year.
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A series of oil leaks, occurring between November 2011 and March 2012, tarnished the operation’s reputation. Chevron was fined by the ANP and forced to halt production for more than a year. With attention shifting to new pre-salt blocks, the oil field became a problematic asset, creating the perfect opportunity for sale.
PRIO’s Master Move: The Phased Purchase That Consolidated 100% of the Field Between 2019 and 2021
PRIO, a Brazilian company specialized in revitalizing mature fields, saw the opportunity and acted strategically. The acquisition of the oil field was made in phases, mitigating risks.
The decisive move occurred in January 2019, when PRIO acquired Chevron’s 51.74% stake, taking control of the operation. With the success of the initial interventions, the company took the final step: in February 2021, it completed the purchase of the remaining 30% owned by Petrobras, becoming the sole owner of the Frade Field.
The 250% Turnaround: How PRIO Increased Oil Field Production From 15,000 to Over 55,000 Barrels Per Day
With full control, PRIO implemented an aggressive revitalization plan. The drilling of new production wells yielded immediate results. The first one, ODP4, began production in 2022 and alone added about 15,000 barrels daily to production, double the expectation.
The campaign continued, and by the end of 2023, the oil field reached a production peak of 55,300 barrels per day, an increase of over 250% since PRIO took over. Furthermore, the revitalization work extended the field’s lifespan by more than 16 years and reduced CO2 emissions by 70%.
The 1,500% Appreciation of PRIO Shares and the Record Profit of US$ 711 Million in 2022
The operational success was directly reflected in financial results. The turnaround at Frade resulted in PRIO’s revenue growing 14 times between 2019 and 2024. In 2022, the company reported a record net profit of US$ 711 million.
The stock market reacted resoundingly. During the same period, PRIO shares (PRIO3) appreciated by more than 1,500%, transforming the company from a small operator into a cash-generating powerhouse and one of the biggest success stories on the Brazilian stock market.
Frade as a Strategic Hub for the Development of the Wahoo Field
With the revitalization consolidated, the role of the oil field evolved. It has ceased to be just a producing field to become a strategic “hub” for PRIO. The next major project for the company is the development of the Wahoo Field.
Rather than building a new and expensive structure, PRIO will connect Wahoo to the existing infrastructure in Frade through a 35 km subsea pipeline. This extremely efficient decision will drastically reduce costs and accelerate production of the new field, which will add about 40,000 barrels per day, all processed by the Frade structure.
Privatizar é bom
Mas as ações da Petroleira, com pequenas variações para +/- desde então. Em termos de valorização de ações, nada mudou para os investidores até o momento.
Espetacular