PetroRio Defines Phase 3 in the Revitalization Plan for the Polvo Field

Written by Paulo Nogueira

Published on 22/02/2019 at 12:55

Updated on 22/02/2019 at 13:12

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The Brazilian Oil Company PetroRio Should Invest Even More in the Polvo Field as Part of the Offshore Field Revitalization Plan, Aiming to Increase Recovery Rates and Extend the Field’s Lifespan.

PetroRio announced today (22) that the first phase of the Polvo field revitalization occurred in 2016 and resulted in a 20% increase in production and reserves of the field. In the second phase, the 2018 Drilling Campaign was completed at a total cost of US $ 42.7 million and increased the asset’s production by approximately 65%, while extending its lifespan to 2024 considering 1P reserves, 2027 with 2P, and 2031 when considering 3P reserves.

Now, using the information collected during the 2018 drilling campaign, PetroRio has defined the goals for Phase 3 of the Revitalization Plan, which consists of a new drilling campaign in 2019.

For this campaign, 22 reservoirs with oil potential have been mapped and classified, of which up to four wells will be selected for drilling, with 18 held for future campaigns, the oil company reported.

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The 2019 drilling campaign will be launched between the second and third quarters of 2019, after investments in the company’s drilling platform – which is part of the fixed platform in Polvo (Polvo-A) – are completed in the first half of 2019. Each well will take approximately two months from drilling to completion and production.

PetroRio expects that the 2019 drilling campaign could extend the life of the Polvo field until 2030, considering 1P reserves, with each well initially producing around 2,000 barrels per day.

PetroRio estimates that the four wells in total will cost between US $ 30 million and US $ 60 million, depending on the success of each well.

Onsite Financing

PetroRio reported that it has signed a pre-payment export contract with ICBC to access a US $ 60 million loan with a four-year term. The agreement includes a marketing deal with PetroChina, allowing the company to sell
Polvo production during the contract period. The facility also includes an additional credit line of US $ 60 million, depending on the outcome of the 2019 drilling campaign.

PetroRio has also signed a credit line of up to R $ 90 million with a term of 10 years, including a grace period of 2.5 years.

“PetroRio expects to implement EOR (Enhanced Oil Recovery) techniques in the Polvo Field, including polymer flooding, well acidification, and multilateral well drilling, among others, to improve well productivity, increase oil recovery rates, and prolong the economic life of Polvo. The Company believes that both financing contracts are essential to fund the revitalization plan of the Field, allowing PetroRio to implement cash for ongoing and future acquisitions. Additionally, the financing contracts allow the Company to move closer to an ideal capital structure and mark PetroRio’s entry into long-term debt financing,” said PetroRio.

FPSO with Extended Contract

As previously reported, PetroRio signed last month an agreement with BW Offshore for a one-year extension for the lease and operation of the FPSO Polvo operating in the namesake offshore field in Brazil.

The firm period has been extended from the third quarter of 2019 to the third quarter of 2020, with options until Q3 2022.

The FPSO Polvo was awarded a one-year extension in January 2018. This option expires in the third quarter of 2019.

BW Offshore is operating the FPSO Polvo in the Polvo field, operated by PetroRio, located in the Campos basin off the coast of Brazil, approximately 100 kilometers from the Rio de Janeiro coast, at depths of about 100 meters.

The field was developed with a fixed platform, known as Polvo A, and the FPSO Polvo, which is capable of processing daily oil production of 90,000 barrels per day, with storage capacity of 1.6 million barrels.

PetroRio Defines Phase 3 in the Revitalization Plan for the Polvo Field

The Brazilian Oil Company PetroRio Should Invest Even More in the Polvo Field as Part of the Offshore Field Revitalization Plan, Aiming to Increase Recovery Rates and Extend the Field’s Lifespan.

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Onsite Financing

FPSO with Extended Contract

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PetroRio Defines Phase 3 in the Revitalization Plan for the Polvo Field

The Brazilian Oil Company PetroRio Should Invest Even More in the Polvo Field as Part of the Offshore Field Revitalization Plan, Aiming to Increase Recovery Rates and Extend the Field’s Lifespan.

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