The U.S. oil major,
), received an authorization from National Petroleum Agency (ANP)
- the oil regulator of Brazil - to restart its operation in the
Frade field. Chevron is about to resume its production in Brazil
after more than a year, after operations were freezed in Mar 2012
in the aftermath of an oil spill in Nov 2011. Frade is an
offshore oil and gas field, situated in the Campos Basin, Brazil,
at a water depth of roughly 3,700 feet.
Per the authorization, Chevron will restart production from four
wells in the field for a period of one year. Chevron will also be
allowed to operate two other wells for up to two months, if there
is a need to balance the reservoir's oil and gas pressure.
However, Chevron will not be allowed to burn excess natural gas
during the production of crude oil.
Prior to the incident, the Frade field was producing at the
rate of 70,000 barrels per day, while it was churning out roughly
35,000 barrels a day during the shutdown of the field four months
after the oil spill.
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The company officials reveal that Chevron is going to start its
operation very soon, provided all the precautionary measures are
Chevron holds 52% operating interest in the Frade field. The
other operators are
Petroleo Brasileiro S.A., or Petrobras
) and Frade Japão, holding 30% and 18%, respectively.
San Ramon, Calif.-based Chevron is one of the world's largest
publicly traded oil and gas companies, based on proved reserves.
It is engaged in oil and gas exploration and production, refining
and marketing of petroleum products, manufacturing of chemicals,
and other energy-related businesses. The company divides its
operations into two main segments: Upstream and Downstream.
The company's financial flexibility and strong balance sheet are
real assets in this highly-uncertain period for the economy.
However, Chevron's production growth profile depends on the
timely development of the upstream projects, almost all of which
have inherent risk factors. Time and cost overruns on these
programs may lead to lower returns, going forward.
Chevron currently retains a Zacks Rank #3 (Hold), implying that
it is expected to perform in line with the broader U.S. equity
market over the next one to three months.
Two firms in the energy sector that are expected to significantly
outperform the equity markets in the next one to three months are
Calumet Specialty Products Partners LP
Range Resources Corporation
). Both these stocks carry a Zacks Rank #1 (Strong Buy).