PetroRio, a Brazilian independent oil company specialized in revitalizing mature oil fields, has excelled at using cutting edge recovery technology, and applying an efficient program of reservoir management to pinpoint mature fields with potential to increase recovery.
Since 2014, PetroRio has been applying its strategy of only investing in mature field that are in production, instead of the market norm of competing to acquire unexplored areas at ANP auctions and risking an expensive exploration campaign.
“Our good performance is due to decisions made since we took over the company, excellent management and the belief in our management method. Today, we position ourselves as one of the most successful cases in the country's energy industry,” said Nelson Queiroz Tanure, CEO of PetroRio, during the OTC Brasil 2019 conference.
This strategy, according to Tanure, was inspired by successful examples from the US and Europe, where the mature fields segment is well developed. It was considered a very risky move when the new management decided, back in 2014, to apply its remaining resources in funding the purchase of fields already in production to generating revenues to be reinvested in new assets.
“2018 was a year of record performance in the most diverse indicators, and we were able to deliver the best result in PetroRio's history,” explained Tanure.
In 2018, PetroRio earned R$204.9 million (US$48.89 million), an increase of around 300% compared to 2017. Net revenue ended the year at R$848.9 million (US$ 202.54 million), an increase of 59% over 2017. Today, PetroRio is the 10th largest oil producer in Brazil.
In the southern sector of the Campos Basin in Rio de Janeiro lies one of PetroRio's most important assets, the Polvo field, which it purchased and has been operating since 2014, with a production of approximately 8,000 barrels per day.
At the time of the Polvo buy, PetroRio's management was convinced that it was necessary to prepare for lower oil prices and for an even more critical scenario. A major management effort has been made to decrease costs and waste, targeting maximum efficiency and results. Within a few months, the production cost per barrel of the Polvo Field dropped from US$86 to US$56, while the company managed to make production much more efficient.
“We kept up the pace of production and growth, even in a scenario of economic crisis in the country, which strongly affected the oil and gas industry. While some companies are still recovering, PetroRio is looking for new projects and investments, reinforcing its differentiated management method that, in the first place, values the people, who are the talents that build our company,” said Tanure.
Polvo field drilling campaign map (Image: PetroRio)
In October 2019, PetroRio began the third phase of the Polvo field revitalization plan. With a new drilling campaign featuring up to four wells. Divided in two stages, the plan calls for an initial investment of US$20 million and based on the results achieved, the figure may reach US$60 million. The estimate is that this phase will add an additional 3 to 6 million barrels of oil to the company's reserves.
“The expressive results we obtained at Polvo are the fruits of our successful strategy and the hard work of our teams. In the first phase we registered a 20% production increase and increase in reservoir volumes in the field. Then in the second phase, the increment in production of the asset was 65%. For this reason we are really satisfied and confident that the next campaigns will have even better results,” Tanure said.
The Polvo campaign mapped a total of 22 wells with oil potential, of which four are being drilled and the other 18 wells will be kept for future exploration opportunities. The investments at the Polvo Field reinforce PetroRio's position as a mature field development pioneer in Brazil, using advanced technologies and technical innovation to reach their objectives, which also include increasing profit margins, and increasing the economic life of the mature fields they operate.