Page 12 - LatAmOil Week 16 2020

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 These efforts are not likely to have much con- crete impact, as the National Assembly is domi- nated by allies of opposition leader Juan Guaido, who has alleged that Maduro used fraudulent means to secure re-election in late 2018. Guaido, who has the backing of the US, was named
Oil companies urge Brazil to close 29 oilfields in light of pandemic
interim president more than a year ago. Nevertheless, Maduro has declared the National Assembly to be illegitimate in its current form and routinely ignores its rulings. Instead, he has set up a parallel legislature that
sides with his administration. ™ BRAZIL
TWO Brazilian oil companies have asked the government to shutter 29 oilfields, which have a total production of 65,000 barrels per day (bpd).
According to Brazil’s National Agency of Petroleum, Natural Gas and Biofuels (ANP), the requests cover 16 offshore fields and 13 onshore sites.
The national oil company (NOC) Petrobras is looking to divest 20 of them because they are experiencing a decline in output, ANP said.
The agency did not identify any of the sites targeted for closure but said that one of the onshore fields was in the Reconcavo Basin. This basin, which Brazil’s largest, lies along the Atlan- tic Coast near the city of Salvador and covers an area of about 10,000 square km.
All but one of the requests were filed by cash- strapped Petrobras, which is still recovering from the Car Wash corruption scandal, ANP added. The other request, which covered the onshore field in the Reconcavo Basin, was sub- mitted by a smaller oil company, it said, without naming the firm.
ANP director Marcel Castilho explained that both companies had taken this step in response to the coronavirus (COVID-19) outbreak. “The main motivation for these production stops
is related to the pandemic, which has led to a reduction in the demand for oil and oil products in Brazil and in the world, and the sharp fall in prices,” he said.
Castilho went on to say that he expected more temporary stoppage requests to be filed in the near future. Petrobras has recently unveiled plans to cut production by 200,000 bpd, so it will need to rein in development work, he commented.
The coronavirus and its knock-on effects have come at an awkward time for Petro- bras, which announced last December that it intended to sell $20-30bn worth of assets, including eight Brazilian refineries, in the 2020- 2024 period. The firm also stated last month that it was planned to reduce investments this year by nearly a third to $8.5bn.
The Rio de Janeiro-based NOC is trying to pay down debt and recover from the ongoing corruption scandal, through a strategy based on divesting non-core assets to focus on Brazil’s deepwater pre-salt area. The major, which is one of the largest oil companies in the world, has said previously that additional sell-offs and other cost-cutting measures could boost its equity value by roughly 45% by 2021. ™
Petrobras submitted 28 of the 29 applications for field closure (Photo: Grupo Rust & Resinar)
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w w w . N E W S B A S E . c o m Week 16 23•April•2020