Brazil's state-run oil company Petrobras will have to agree to extract at least 900 million barrels more of oil and natural gas equivalent from its Marlim and Voador offshore oil fields to win early renewal of its concession rights, oil regulator ANP said.
According to a report by Reuters, the financially troubled Petrobras, the world's most-indebted oil company, has said it wants to renew the contracts to explore for and produce oil in the areas through 2041 to justify new long-term investments. The concession was originally scheduled to expire in 2025.
Marlim, which began output in 1985, is believed to have contained as much as 14 billion barrels of oil, and is one of the world's largest oil-field discoveries in the last 40 years. Voador, which is nearly adjacent to Marlim in the Atlantic Ocean northeast of Rio de Janeiro, is currently not producing but is home to several new prospects.
By renewing early, it will be able to ensure it can count any remaining reserves on its financial accounts for a longer period, a move that could make it easier for it to raise capital.
The ANP, which has approved the submission of the renewal request to Brazil's Energy Ministry, also said Petrobras will have to install at least two new floating oil platforms as well as drill new wells and conduct periodic seismic studies in the areas.
Marlim in October produced 204,000 barrels of oil and natural gas equivalent a day, making it Brazil's fifth-largest producing field. At current levels of output, the 900 million barrels of new output would take 12 years to produce.
Marlim, though, is in decline and even with new wells and oil recovery efforts, production levels are expected to drop over coming years. Despite declining output new development at Marlim and Voador can benefit from extensive existing pipeline and other infrastructure already installed at the site.