RIO DE JANEIRO - Brazilian independent oil producer OGX Petroleo e Gas Participacoes SA said Tuesday that crude oil production plunged in April as the company continues to repair equipment at the Tubarao Azul offshore oil field.
OGX produced an average 13,900 barrels of oil equivalent, or BOE, in April, the company said in a statement. The firm produced a meager 1,800 BOE per day from Tubarao Azul, down from 8,300 BOE in March and 11,300 BOE in February.
In March, the firm shut down two of the three production wells at Tubarao Azul for repairs to underwater pumps. One of the wells, OGX-68HP, could be repaired by mid-May, while work on a second damaged pump at the TBAZ-1HP well would begin after that, the firm said.
A third well produced for 14 days in April, with periodic shutdowns necessary to avoid damaging an underwater pump that has been overheating, OGX said.
OGX has had better luck with the Gaviao Real field, which produced the equivalent of 4.1 million cubic meters of natural gas per day total, including shares to OGX's partners. The natural gas is used to fire a nearby power-generation plant, Parnaiba 1, that is generating electricity from four turbines, OGX said.
Disappointing production at Tubarao Azul have undercut OGX's shares since mid-2012 and created doubts about billionaire Brazilian businessman Eike Batista's ability to deliver on his development plans. The troubles at OGX have caused investors to question bets on Mr. Batista's other companies, which span interests as diverse as real estate, mining and shipbuilding.
OGX shares closed Monday at BRL1.97, posting strong gains amid news that the company could be closing in on a deal to sell a stake in a second oil field, Tubarao Martelo, to Malaysian state oil company Petronas for $850 million. Tubarao Martelo is expected to start production in the fourth quarter of this year.
Copyright (c) 2012 Dow Jones & Company, Inc.
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