Page 12 - LatAmOil Week 12 2020

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Earlier this month, before oil prices collapsed, Wood Mackenzie forecast that Brazilian explo- ration projects would draw around $3bn worth of investment this year.
It predicted that most of this sum would come from Petrobras, Royal Dutch Shell (UK/ Netherlands) and Equinor. (Petrobras alone was anticipated to spend an average of $2.3bn per year on exploration programmes between 2020 and 2024, Reuters noted last week.)
According to Wood Mackenzie, exploration
budgets may fall by 20% across the board if world crude oil prices average $35 per barrel this year, Wood Mackenzie is now predicting a 20% reduction in exploration budgets across the board, it added.
Brazil’s pre-salt zone is one of the most prom- ising offshore plays in the world, as it contains billions of barrels of oil beneath a layer of salt under the ocean floor. Pre-salt fields helped Petrobras push outpu up to record highs above 3mn bpd in the fourth quarter of 2019.™
Petrobras asks to draw $8bn from credit lines amid pandemic
BRAZIL’S state-controlled oil and gas com- pany Petrobras has asked to draw $8bn from its revolving credit lines.
The heavily indebted company said in a secu- rities filing that the move would help improve liquidity at a time of uncertainty stemming from the coronavirus (COVID-19) pandemic and extremely volatile oil prices. “The disbursement is consistent with the strategy of strengthening the company’s liquidity, in order to protect itself within the current context of crisis,” Petrobras said.
The Rio de Janeiro-based firm also said it was considering taking other measures to improve cash flow, including cutting its expenses. “The company is endorsing other measures that are further reinforcing its cash flow, such as a fur- ther reduction of costs and losses of its working capital,”itsaidinthefiling,whichwaspostedon its website.
Before the coronavirus outbreak and the slide in oil prices, Petrobras had been trying to pay down its debts and recover from the Lava Jato (Clean Hands) corruption scandal. Its efforts to achieve these goals rested largely on divesting non-core assets and focusing on exploration and development of deepwater pre-salt fields.
Last December, Petrobras said it was intend- ing to sell $20-30bn worth of assets, including eight Brazilian refineries, in the 2020-2024 period. The firm has also said it may sell sec- tions of the Marlim field, one of Brazil’s largest
oil deposits, as well as its majority stake in the smaller Papa-Terra field, among other assets. The additional sell-offs and other cost-cutting measures could boost the country’s equity value by roughly 45% by 2021.
Between 2020 and 2024, the firm’s spending will be concentrated on the offshore pre-salt for- mation, with a special emphasis on the Buzios oilfield. This offshore field, formerly known as Franco, is located within the Cessão Onerosa (Transfer of Rights) region of the Santos Basin. It produced its first oil in April 2018, and last September its output reached 327,828 barrels per day (bpd).™
Golar LNG makes move in Brazil
GOLAR Power is expanding its footprint in Bra- zil’s LNG industry. The company announced this week that it had signed a “protocol of intentions”
with the government of Pernambuco State to develop an LNG import terminal in the Port of Suape, in north-east Brazil. 
Petrobras hopes extra funds will help improve liquidity (Photo: Poder 360)
P12 w w w . N E W S B A S E . c o m Week 12 26•March•2020