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Brazil oil and gas watch

Bnamericas Published: Friday, July 29, 2022
Brazil oil and gas watch

Petrobras approved a conduct adjustment agreement (TAC) with oil and gas watchdog ANP to offset local content fines related to 22 concessions in which the company has 100% participation. 

The projects are located in the Barreirinhas, Campos, Espírito Santo, Parecis, Potiguar, Recôncavo, Santos, Sergipe-Alagoas and Solimões basins.

The TAC provides for the conversion of fines for non-compliance with the local content clause of the 22 concessions into commitments of investments in exploration and production with local content. 

Under the terms of the agreement, Brazil’s state-run oil firm commits to invest approximately 1bn reais (about US$200mn) in local content by 2026.

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Petrobras’ board approved a new guideline that increases the power of directors and the company's fiscal council on decisions involving fuel prices.

In a statement, the company reiterated that it will continue to be up to senior executives to determine pricing policy, in order to "preserve and prioritize the company's economic results." 

Management, however, will have to report quarterly to the board of directors and the audit committee on prices charged in the domestic market for diesel, gasoline and LPG, as well as the participation of Petrobras in these markets.

Petrobras highlighted that the move does not change the alignment of the company's prices to the import parity price (IPP).

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As of Friday, the average Petrobras gasoline sale price to distributors will fall from 3.86 reais to 3.71 reais per liter, the company said on Thursday. 

Considering the mandatory blend of 73% A gasoline and 27% anhydrous ethanol for the composition of the gasoline sold at service stations, Petrobras' portion in the price for the consumer will go from 2.81 reais, on average, to 2.70 reais per liter sold at the pump.

And, as of August 1, reductions of 2.6% in the average sales prices of aviation kerosene, of 5.7% in the average prices of aviation gasoline and of 4.5% in the average prices of asphalt to distributors will be implemented, the company added.

Petrobras’ current sale prices are available here

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The probable reserves (2P) of the Atlanta field grew by 50% from 105.7Mb (million barrels) on December 31, 2021 to 155.7Mb on June 30, 2022, according to its operator Enauta

In May, ANP approved the new development plan and the extension of the project's concession contract for another 11 years. With this, the concession term was extended to 2044 and resources previously considered contingent were reclassified to 2P reserves. 

In addition to the new term, the company statement stipulates the drilling of four more wells by the end of the decade, besides six that are due to be producing when the Atlanta FPSO starts operating in 2024.

Meanwhile, the 2P reserves in the Manati field, in the Camamu basin, reached 12Mboe, up 54% compared to December 2020. 

The increase was mainly due to the feasibility of a new technical condition for operating the compressor station onshore and offshore, allowing for greater recovery of gas reserves.

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Brazil’s antitrust authority Cade has approved the sale of Petrobras’ Golfinho, Canapu, Camarupim and Camarupim Norte fields to a consortium formed by BW Energy and Saipem.

The operation includes the Cidade Vitória FPSO, owned by Saipem and chartered to Petrobras to operate in the fields, in addition to a 65% interest in block BM-ES-23 and other related assets.

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