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Petrobras Begins Production at Its FPSO P-68 Unit in Brazil

Petrobras PBR recently commenced oil and gas production on the P-68 platform of the pre-salt Santos Basin.

Notably, P-68 is a floating production storage and offloading (FPSO) unit and the company’s fourth start-up in 2019, succeeding the earlier operations at P-67 in Lula field as well as P-76 and P-77 in the Buzios field.

Located 230 km offshore Rio de Janeiro at 2,280-meter water depth, P-68 has daily processing capacity of 150,000 barrels of oil and 6 million cubic meters of natural gas. Crude oil offloading will be carried out by shuttle tankers while gas production is planned to be transported through pre-salt gas pipelines.

In the project collectively known as Iara, 10 producer wells and seven injector wells are likely to be connected to the P-68 facility from both Berbigao and Sururu field in the BM-S¬-11A concession.

While Petrobras is the chief operator of the project with 42.5% interest, Shell RDS.A, TOTAL TOT and Petrogal Brasil own 25%, 22.5% and 10% stakes, respectively.

Another FPSO P-70 with similar oil producing capacity is expected to come online in 2020 nearby BM-S-11A.

One of the largest energy companies in Brazil, Petrobras recently reported break-even earnings in third-quarter 2019 compared with the Zacks Consensus Estimate of 28 cents and the year-ago quarterly income of 26 cents. These unfavorable comparisons stem from lower average realized commodity prices and decline in oil product sales, which more than offset impressive production growth and lower lifting costs.

This Brazilian state-run energy giant’s revenues of $19,416 million missed the Zacks Consensus Estimate of $20,307 million and also fell from the year-earlier sales of $22,547 million.

Zacks Rank & Key Pick

Petrobras currently carries a Zacks Rank #3 (Hold). A better-ranked stock in the energy space is World Fuel Services Corporation INT, carrying a Zacks Rank #2 (Buy). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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