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Petróleo Brasileiro S.A. - Petrobras PBR, on behalf of the Tupi field consortium, recently announced an extension to the charter term of the FPSO Cidade de Angra dos Reis by another five years. The extension contract for the floating production, storage and offloading (FPSO) unit was inked with Tupi Pilot MV 22 BV and Modec Serviços de Petróleo do Brasil Ltda. for prolonging the FPSO stay along with certain adjustments to the unit so that it can boost the current production potential.
After extending the services of the FPSO for another five years, the consortium expects to decommission the unit in 2030.
The Tupi consortium comprises Petrobras, which has an operating interest of 67.21%; Shell, which holds a 23.02% interest; Petrogal, which holds a 9.20% interest; and PPSA, which holds a 0.551% interest.
How Will PBR Benefit From the Contract Extension?
Along with extending the term of the contract, PBR is all set to make certain amendments to the terms of the agreement to include the provision of certain upgrades to the FPSO unit and to boost the production potential beyond its current levels of about 50,000 barrels per day. The improvements in the FPSO unit will not only bolster production efficiency but will also enhance the integrity of the platform with better operational safety and reduced greenhouse gas emissions.
The contract extension seamlessly aligns with PBR’s 2025-2029 business plan and emphasizes its commitment to continuing to expand its operations in the Tupi field.
Overview of Cidade de Angra dos Reis FPSO
Cidade de Angra dos Reis was the first high-capacity FPSO to operate in the pre-salt layer of the Santos Basin. The unit is capable of processing up to 100,000 barrels of oil per day and 5 million m3 of gas. The FPSO is a pioneer of technological advancement as it can remove H2S and CO2 and re-inject CO2 downhole at 550 bar. The FPSO has been working on the Tupi field since October 2010 on a 15-year lease agreement and has received a five-year contract extension to work until 2030.
PBR’s Zacks Rank and Key Picks
Headquartered in Rio de Janeiro, Petrobras is the largest integrated energy firm in Brazil and one of the largest in Latin America. Currently, PBR has a Zacks Rank #3 (Hold).
Investors interested in the energy sector might look at some top-ranked stocks like Equinor ASA EQNR, Gulfport Energy Corporation GPOR and Cheniere Energy, Inc. LNG.While Equinor and Gulfport Energy currently sport a Zacks Rank #1 (Strong Buy) each, Cheniere Energy carries a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.