Brazilian oil companies Barra Energia, QGEP Participacoes SA (QGEP3.BR) and OGX Petroleo e Gas Participacoes SA (OGXP3.BR) received approval to develop the Oliva offshore oil field, Barra Energia said Tuesday.
The Oliva field sits in the same area where billions of barrels of crude oil were found trapped under a thick layer of salt off Brazil's coast, and the three companies eventually hope to drill into the pre-salt layer. Oliva and a sister oil field known as Atlanta are above the salt layer.
Barra Energia, QGEP and OGX earlier this received similar approval to develop the Atlanta field, which is estimated to hold recoverable reserves of about 260 million barrels. Oliva is considered about half the size of Atlanta, although no estimates of recoverable reserves have been released.
Development of Atlanta and Oliva continue QGEP's emergence as a growing player in Brazil's offshore oil industry. The firm currently produces natural gas from the Manati offshore field, while first oil from Atlanta is expected between the second half of 2014 and the first half of 2015. First oil is expected to be produced at Oliva in 2021, Barra Energia said.
The approval could also help troubled OGX regain some credibility. OGX has suffered from lower-than-expected production and operational problems at its Tubarao Azul field. The issues at Tubarao Azul created a crisis of confidence for controlling shareholder Eike Batista's EBX Group of companies as investors grew concerned that many of the start-up firms would be unable to produce concrete returns. OGX is currently restructuring its debts.
Barra Energia holds minority stakes in several promising offshore areas but doesn't yet produce any oil.
QGEP operates the BS-4 block with a 30% stake. Barra Energia owns 30%, while OGX holds the remaining 40% after buying out state-run energy giant Petroleo Brasileiro (PBR, PETR4.BR) for $270 million last November.
QGEP shares were down 0.6% at BRL11.78 in early afternoon trading, while OGX shares were up 2.5% at BRL0.41. Barra Energia is closely held.
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