Page 5 - LatAmOil Week 32

LatAmOil COMMENTARY LatAmOil
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In a third statement, it said that SPE 3R Petroleum had agreed to pay $191.1mn for the elds, which are located in the Potiguar Basin. e sites are currently producing around 5,800 barrels of oil equivalent per day (boepd).
Also on August 9, the company informed investors of its intent to divest its stakes in a group of 11 shallow-water elds in the Campos Basin. e sale covers not only the elds, known collectively as the Garoupa Cluster, but also pro- duction facilities and pipelines linking the sites to Barra do Furado, it said. ese licence areas are currently yielding about 19,600 boepd alto- gether, it added.
Midstream, downstream and other
Meanwhile, another source reported that Petro- bras was looking to sell o some of its thermal power plants (TPPs).
Analysts at Sao Paulo-based XP Investi- mentos said a er a breakfast meeting with the NOC’s CEO, Roberto Castello Branco, last week that the company was looking into proposals for creating a new subsidiary to operate about 15 TPPs. In a report sent out to clients, the broker- age said that Petrobras would set up the new unit and then sell it o via an initial public o ering (IPO). It did not say what the total generating capacity of this subsidiary might be. (Petrobras owns some 20 TPPs with a combined capacity of around6,000MW.)
According to the report, the company is also considering a midstream joint venture with pri- vate investors. Petrobras wants to team up with companies that are already working in Brazil’s o shore zone to establish a pipeline company
that can pump natural gas from pre-salt elds to the shore and then unload its stake a er the new entity becomes operational.
Complementary efforts
Some of the assets slated for sale – the biofuel company, the gas pipelines and the power sta- tions – operate in the midstream, downstream and other sectors. is is hardly surprising, as the government is working to bolster Petrobras’ upstream pro le. But as noted above, some of the assets slated for sale are upstream explo- ration and/or development sites – the Macau Cluster, the Garoupa Cluster and the three Espiritu Santo elds.
is is not an oversight or a mistake. e company is not seeking to hive o these par- ticular upstream assets in spite of the divestment programme but because of it.
In the case of the Garoupa and Macau Clus- ters, Petrobras is unloading brown eld projects that are producing relatively small amounts of oil and gas. And in the case of the Espiritu Santo elds, the NOC intends to use the proceeds of the sale to invest in more complicated projects – namely, the development of subsalt fields located o shore in very deep waters.
ese large-scale, ultra-deepwater projects are likely to prove far more lucrative over the long term than the onshore and shallow-water sitesslatedforsale.Overall,then,thedivestment of these upstream assets will bolster e orts to reshape Petrobras’ portfolio and reorient it towards high-value initiatives. The company is therefore likely to o er up more elds of this type over the next few years. ™
NEW Fortress Energy increased its revenues in the second quarter of 2019 over 2018, but the net loss also grew, from $18.8mn to $51.2mn. Over the rst six months of the year, net losses reached $111.5mn, from $29.74mn in the same period of 2018. e company, which has small- scale liquefaction facilities in the US and regasi- cation operations around the Caribbean, held its initial public o ering (IPO) at the beginning of 2019.
Total committed volumes rose to 2.6mn gal- lons per day (9.8mn litres per day) in the second quarter, from 1mn gpd (3.79mn lpd) in the same three months of 2018. Talks are being held on the delivery of 16mn gpd (60.6mn lpd).
During the second quarter, the company’s Old Harbour terminal in Jamaica was commis- sioned and began commercial operations. e micro fuel-handling facility in Puerto Rico’s San Juan is set to start up in the last quarter. e San Juan plan involves a pipeline and truck-loading facility.
Power projects in Jamaica and Mexico are anticipated to be completed in the last quarter of 2019 and the second quarter of 2020 respec- tively. In addition to various projects underway, New Fortress has also signed a preliminary deal with Angola on the provision of LNG import capacity, with talks in progress with a second country.
Revenues rose as a result of the Old Harbour project, in addition to higher volumes at Mon- tego Bay, also in Jamaica.
However, the cost of goods sold was higher, reaching $0.83 per gallon ($0.22 per litre) in the second quarter, from $0.69 per gallon ($0.18 per litre) in the rst quarter. Line costs for oper- ations and maintenance (O&M), and selling, general and administrative (SG&A), were also up in the period. New Fortress blamed higher O&M costs on operating charter vessels, while SG&A was up on increased personnel and fees.
Operating expenses roughly doubled in the period to $83.7mn.
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CARIBBEAN
e-scale, “
ultra-deepwater projects are likely to prove far more lucrative for Brazil over the long term
Larg
New Fortress racks up red ink
Week 32 14•August•2019 w w w . N E W S B A S E . c o m
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