Brazilian oil company PetroRio is set to invest further into the Polvo field as part of the offshore field’s revitalization plan, which aims to increase the Polvo field’s recovery rates and extend its useful life.
The first phase of the revitalization of the Polvo field took place in 2016 and resulted in a 20% increase in both the Field’s production and reserves. In the second phase, the 2018 Drilling Campaign was concluded at a total cost of US$ 42,7 million and increasing the asset’s production in approximately 65%, while extending its useful life to 2024 considering 1P reserves, 2027 with 2P, and 2031 when considered 3P reserves, PetroRio has said.
Now, using information gathered during its 2018 Drilling Campaign, PetroRio has defined the targets of Phase 3 of the Revitalization Plan, which consists of a new drilling campaign in 2019.
For this campaign, 22 reservoirs with oil potential were mapped and ranked, of which up to four wells will be selected for drilling, and 18 kept for future campaigns, the oil company said.
The 2019 drilling campaign will be launched between the second and the third quarter of 2019, after the investments on the company’s drilling rig – which is part of the fixed platform in Polvo (Polvo-A) – are completed during the first semester of 2019, PetroRio added. Each well will take approximately 2 months from drilling to completion and production.
PetroRio hopes the 2019 drilling campaign could extend the Polvo field’s life to 2030 considering 1P reserves, with each well initially producing approximately 2,000 barrels a day.
PetroRio estimates that the four wells in total will cost between $30 million and $60 million, depending on the success of each well.
Funding in place
PetroRio has said it has signed a pre-payment export agreement with ICBC, to access a $60 million loan with a term of four years. The deal includes a Marketing Agreement with PetroChina, allowing the company to sell Polvo’s production for the duration of the agreement. The facility also includes a further $60 million line of credit, depending on the outcome of the 2019 Drilling Campaign.
PetroRio has further signed a line of credit of up to R$90 million with a 10-year term, including a 2.5-year grace period.
“PetroRio expects to implement EOR (Enhanced Oil Recovery) techniques in the Polvo Field, including use of polymer flooding, well acidizing and multilateral well drilling, among others, to improve well productivity, increase oil recovery rates, and extend Polvo’s economic lifespan. The Company believes both financing agreements are essential to fund the Field’s revitalization plan, thus allowing PetroRio to deploy cash towards ongoing and future acquisitions. Furthermore, the financing agreements allow the Company to move closer to an optimal capital structure and mark PetroRio’s debut in long-term debt financing,” PetroRio said.
As reported earlier, PetroRio last month has signed an agreement with BW Offshore for a one-year extension for the lease and operation of FPSO Polvo operating at the namesake field offshore Brazil.
The firm period had been extended from the third quarter of 2019 to the third quarter 2020, with options until 3Q 2022.
The FPSO Polvo was previously awarded a one-year extension back in January 2018. This option expires in the third quarter of 2019.
BW Offshore is operating the FPSO Polvo on the Petrorio-operated Polvo field located in the Campos basin offshore Brazil, approximately 100 kilometers off the coast of Rio de Janeiro, in water depths of around 100 meters.
The field has been developed with a fixed platform, known as Polvo A, and the FPSO Polvo, which is capable of handling a daily oil production of 90,000 barrels of oil per day, with a storage capacity of 1.6 million barrels.
Offshore Energy Today Staff