Petrobras intends to start a new round of renegotiation of contracts in a new attempt to cut operational costs. The company managed to reduce several contracts in Campos basin by 13.0% in 2015.
The company released the 2015-2019 Business and Management Plan in June 2015, expecting an amount of divestments revised to USD 15.1 billion in 2015/2016: 30% from Exploration & Production, 30% from Downstream and 40% from Gas & Power.
NOV and Atlântico Sul shipyard cancel contracts for seven drillships
National Oilwell Varco informed in the end of December that it had reached an agreement to cancel seven contracts with Atlantico Sul shipyard for drillship equipment packages in Brazil.
The drillships were contracted by Sete Brasil, and work on many of the rigs is stalled. Out of the 29 rigs being built for Sete Brasil, 28 were on long-term charter deals with Petrobras to operate in the pre-salt.
However, the project ran into trouble throughout last year after a former Sete Brasil manager alleged that the shipyard contracts had been inflated by bribes, which eventually made it difficult for the company to secure the necessary funding.
NOV said it does not expect to take any charge as a result of the settlement, although the cancellations would reduce the company’s Rig Systems segment backlog by USD 1.1 billion in Q4 2015. The backlog was about USD 8 billion at the end of the third quarter.
Focus on pre-salt production
The current investment portfolio of the oil company prioritizes oil E&P projects in Brazil, focusing on the pre-salt. Some wells in place in the pre-salt area already exceed 30,000 boed.
Pre-salt production remains competitive according to Petrobras. The state-owned company affirmed in December it had reduced the extraction price in the pre-salt to USD 8 per barrel. This extraction value does not put into the account the costs related to government participation and the money to recover investments in infrastructure and gas offloading.
In October, PPSA affirmed that the minimum price to make exploitation in the area viable was USD 55 per barrel. Next, the company administrating the contracts in the pre-salt area reported that a value between USD 50-52 per barrel would be sufficient for production in the area. These values have taken into account infrastructure costs to transport the gas produced. Excluding these amounts, still the cost would be USD 45 per barrel.
Improved technology has allowed Petrobras to decrease the drilling time, which helps reducing costs. Lula field reached a drilling time mark below 30 days. In 2010, it was necessary 120 days to perform the same work.
Upstream Online: NOV’s Brazil drillship contracts cancelled
Petrobras – 2015-2019 Business and Management Plan