Petrobras Starts Production at Green Turtle in Campos Basin

Petróleo Brasileiro S.A. or Petrobras PBR recently announced that the company has started production from the Green Turtle field, located in the southern part of the prolific Campos Basin. The company is using the Cidade de Campos dos Goytacazes floating production storage and offloading (FPSO) vessel, chartered from MODEC, for this purpose.

The company has positioned the vessel in Deep Waters of the Campos Basin, around 127 kilometers from the Rio de Janeiro, where water depth is 765 meters. The vessel has a processing capacity of 150,000 barrels of oil along with 3.5 million cubic meters of gas. Moreover, it compresses 5 million cubic meters of gas per day.

The reservoirs in the field are at 3000 meters depth. The Green Turtle field includes the Tartaruga Verde and Tartaruga Mestiça deposits. Commencement of production in the area marks the company’s second platform coming online in 2018, with the first being FPSO P-74, installed in Búzios Field.

Significance

The Brazilian state-run Petrobras has 100% stake in Tartaruga Verde and 69.35% interest in Tartaruga Mestiça. Notably, the company has 2017-2018 divestment goals of $21 billion to reduce debt burden, which also includes part of Tartaruga Verde. The commencement of production is expected to help the company in reaching its divestment goal. In spite of the divestment plan, production ramp up from the field is expected to largely help it reach its 2018 production target of 2.1 million barrels per day.

Production came online in the Green Turtle field, in line with the company’s expectation to contribute heavily in Business and Management Plan (2018-2022). The plan will be supported by the eight platforms scheduled to commence production in 2018 and 11 more coming online by 2022.

Price Performance

Headquartered in Rio de Janeiro, Petrobras has gained 20.9% in the past year compared with 28.2% growth of its industry.

Zacks Rank and Stocks to Consider

Currently, Petrobras has a Zacks Rank #3 (Hold). Investors interested in the Energy sector can opt for some better-ranked stocks like CNOOC Limited CEO, Delek US Holdings, Inc. DK and HollyFrontier Corporation HFC, each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Hong Kong-based CNOOC is an integrated energy company. The company’s top line for 2018 is anticipated to improve 64.4% year over year, while its bottom line is expected to increase 124.3%.

Brentwood, TN-based Delek is an energy company. The company’s top line for 2018 is anticipated to improve 39.2% year over year, while its bottom line is expected to increase 326.19%.

Dallas, TX-based HollyFrontier is an independent refining company. For 2018, its bottom line is likely to be up 153.5%. In the last four reported quarters, the company delivered an average positive earnings surprise of 41.3%.

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