Brazil's OGX Evaluating Funding Options for Concession Auction
RIO DE JANEIRO - Brazilian independent oil producer OGX Petroleo e Gas Participacoes SA plans to invest $1.3 billion in 2013, but that total doesn't include the company's potential participation in an important new auction of oil and natural-gas concessions, OGX's chief financial officer said Wednesday.
"We think that it is interesting for us to participate in the 11th bid round," CFO Roberto Monteiro said during a conference call with analysts. "But we are not disclosing at the moment how much we want to spend or even if we will participate."
Brazil is scheduled to hold the country's 11th auction of oil and natural-gas exploration blocks in May, the first such sale since December 2008.
OGX, part of billionaire Brazilian businessman Eike Batista's industrial empire, doesn't have the financial wiggle room to take on more debt, so participating in Brazil's 11th round auction of oil and natural-gas concessions will require "capital discipline," Mr. Monteiro said. OGX ended 2012 with $1.7 billion in cash.
Among the "alternatives" listed by Mr. Monteiro was a potential sale of a stake in some of OGX's exploration blocks and oil fields, where the company retains majority stakes of between 70% and 100%.
"We have some options still open," he said.
OGX had previously planned to sell a stake in its blocks in the Campos Basin, but never completed a deal.
During the conference call to discuss OGX's fourth-quarter earnings, company officials admitted disappointment with crude-oil output at the Tubarao Azul field. Lower-than-expected production at the field has not only weighed on the company's shares since mid-2012, but also dragged down shares of other companies under Mr. Batista's EBX Group umbrella. The production has generated concern among investors about the ability of his companies to generate returns.
"Production levels in the first two production wells stabilized at a rate below our earlier projections," Chief Executive Luiz Carneiro said during the call. That could result in a reduction in estimates for recoverable reserves at Tubarao Azul, currently projected at 110 million barrels of crude, the CEO added.
OGX officials also said that just because output at Tubarao Azul has been a disappointment doesn't mean that the results can be "extrapolated" to other fields such as Tubarao Martelo, which is expected to start production by year-end, Mr. Carneiro said.
The OSX-2 and OSX-3 floating production platforms should arrive in Brazil in the third quarter, Mr. Monteiro said. OSX-2 will be installed at the Tubarao Tigre, Tubarao Gato and Tubarao Areia fields, while OSX-3 will produce from the Tubarao Martelo field, the executive said.
A well-head platform will also arrive for installation at Tubarao Martelo "sometime mid-next year," Mr. Monteiro said.
WHAT DO YOU THINK?
Generated by readers, the comments included herein do not reflect the views and opinions of Rigzone. All comments are subject to editorial review. Off-topic, inappropriate or insulting comments will be removed.
- Blockchain Demands Attention in Oil and Gas
- Macquarie Sees USA Oil Production Exiting 2024 at 14MM Barrels Per Day
- Oman Sees Increasing Ship-to-Ship Transfers of Russian Oil Bound for India
- CNPC Opens Sea-Land Oil Storage and Transport Facility in Bangladesh
- US Govt Makes Record Investment of $6B for Industrial Decarbonization
- Perenco Still Searching for Missing Person After Platform Incident
- Eni, Fincantieri, RINA Ink Deal on Maritime Decarbonization
- Falcon Oil Declares Commercial Flow Test Results for Shenandoah Well
- Oil Falls as US Inventories Increase
- Czech Utility CEZ Bucks Weaker Prices, Demand to Log Record Annual Profit
- Equinor Makes Discovery in North Sea
- Standard Chartered Reiterates $94 Brent Call
- India Halts Russia Oil Supplies From Sanctioned Tanker Giant
- Centcom, Dryad Outline Recent Moves Around Red Sea Region
- DOI Announces Proposal for Second GOM Offshore Wind Auction
- PetroChina Set to Receive Venezuelan Oil
- Czech Conglomerate to Buy Major Stake in Gasnet for $917MM
- US DOE Offers $44MM in Funding to Boost Clean Power Distribution
- Oil Settles Lower as Stronger Dollar Offsets Tighter Market
- UK Grid Operator Receives Aid to Advance Rural Decarbonization
- Chinese Mega Company Makes Major Oilfield Discovery
- VIDEO: Missile Attack Kills Crew Transiting Gulf of Aden
- Norway Regulator Blasts Proposal to Halt New Oil and Gas Permits
- Chinese Mega Company Makes Another Major Oilfield Discovery
- What Is the Biggest Risk to Offshore Oil and Gas Personnel in 2024?
- Vessel Sinks in Red Sea After Missile Strike
- Exxon Rights in Stabroek Do Not Apply to Hess Merger with Chevron: Hess
- Analysts Reveal Latest Oil Price Outlook Following OPEC+ Cut Extension
- Equinor Makes Discovery in North Sea
- Standard Chartered Reiterates $94 Brent Call