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Petrobras (PBR) Postpones Production From Mero 1 to Next Year

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Zacks Equity Research
·3 min read
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Petroleo Brasileiro S.A. or Petrobras PBR recently informed that the production of Mero 1 development, which was scheduled to start in the fourth quarter of 2021, has been postponed.

Due to a delay in the floating production storage and offloading (FPSO) Guanabara conversion works in China amid coronavirus, Petrobras now expects Mero 1 to go online in the first quarter of 2022.

The converted FPSO with a processing capacity of 180,000 barrels per day will be built in the Mero field off the coast of Brazil. The Mero 1 pre-salt field is located in the north-western part of the Libra block in the prolific pre-salt layer of the Santos Basin at a water depth of 2,100 meters. Notably, the Mero field has three more vital areas, namely Mero 2, Mero 3 and Mero 4, to be developed separately.

Petrobras is the leader and has 40% stake in the Libra consortium. Its partners in the project, namely Royal Dutch Shell plc RDS.A, TOTAL S.A. TOT, CNODC Brasil Petróleo e Gás Ltda. and CNOOC Limited (CEO) own respective interests of 20%, 20%, 10% and 10% in the consortium. The state-run Pré-Sal Petróleo, PPSA is the contract manager of the project. Notably, recoverable resources in the Libra oilfield are in the range of 7.9-15 billion barrels of oil.

Earlier this week, the currently Zacks Rank #3 (Hold) Petrobras informed that it will be taking over BP p.l.c.’s BP operatorship and its stakes in the six exploration blocks located in the Foz do Amazonas Basin, precisely 120 kilometers offshore Brazil. The development took place after the to-be-acquired entity decided to resign as an operator of these blocks, which are usually referenced as FZA-M-57, FZA-M-59, FZA-M-86, FZA-M-88, FZA-M-125 and FZA-M-127. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Company Profile

Petrobras is the largest integrated energy firm in Brazil and one of the biggest in Latin America. The company’s activities include exploration, exploitation and production of oil from reservoir wells, shale and other rocks. The activities also include refining, processing, trading and transportation of oil and oil products, natural gas and other fluid hydrocarbons besides other energy-related operations.

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