US firm enters Latin America’s oil & gas playground as its Brazilian partner in two offshore fields sets restart date for another asset

Houston-based Westlawn Americas Offshore (WAO), part of Westlawn Group, has wrapped up the acquisition of a partial stake in a concession, covering two oil fields located off the coast of Brazil. The firm’s new partner, Brava Energia, former 3R Petroleum before the merger with Enauta, has welcomed the company to Brazil and revealed a timeline for the resumption of production at another oil field in Brazil’s Campos basin.

Westlawn’s move to acquire a partial stake in two offshore fields was disclosed in March 2024, when the firm confirmed its expansion to Latin America to start a new oil and gas growth chapter. The two companies penned a purchase and sale agreement, worth $301.7 million, which enabled the U.S. player to get a 20% participating interest in the BS-4 concession, encompassing the Atlanta and Oliva fields.

Given the fulfillment of all the precedent conditions, and authorization from the National Agency of Petroleum, Natural Gas and Biofuels (ANP), Brava Energia has corroborated the closing of the transaction of 20% interest in the BS-4 concession, which concluded with the payment of $234 million, considering adjustments provided for in the contract, which adds to the $75 million upfront installment received by the Brazilian firm after signing the deal in the spring.

“Brava Energia believes partnerships are essential for value creation and risk management on offshore major projects development. The transaction closing reinforces Brava Energia’s value creation strategy, supported by an efficient capital allocation, a high-growth, risk-adjusted returns portfolio,”  explained the Brazilian operator, as it is convinced the transaction will help improve equity and debt investors’ evaluation of the company.

The partnership with Westlawn is expected to add value to the next phases of the Atlanta field’s development; assist Brava in balance sheet strengthening by allowing to speed up organic and inorganic growth opportunities, shareholders earnings, and access to competitive sources of capital; and contribute to the Brazilian firm’s strategy of maximizing value on the Atlanta oil trading campaign, which is currently sold to low sulfur fuel markets in Southeast Asia.

The Atlanta field, which has been producing since 2018 is situated in the Santos Basin, at a 1,500-meter water depth. The Brazilian firm’s activities aimed at replacing the FPSO Petrojarl I, which has been working at the Atlanta field in block BS-4 in the Santos Basin since 2018, with the FPSO Atlanta, bought for Atlanta’s Full Development System (FDS) in 2022, are in the final stage.

In its previous update, the company disclosed it was still working to comply with regulatory requirements necessary for the pending authorization from the National Agency of Petroleum, Natural Gas and Biofuels for the first oil production through the new vessel.

The installation campaign of the second multiphase pumping module and the connection of the other four wells planned for Phase I of the field development were ongoing in line with the schedule. Chartered and operated by Malaysia’s Yinson Production, the vessel, which can store 1.6 million barrels of oil (boe) and process 50,000 boe and 140,000 barrels of water per day, will stay on the Brazilian field for 15 years, plus a five-year optional period.

Meanwhile, production at the Papa-Terra field in the Campos basin was resumed on August 29 and stabilized at 15,000 barrels per day through six wells (PPT-12, PPT-16, PPT-17, PPT-22, PPT-37 and PPT50), after the scheduled production stoppage that began on July 27. Following ANP’s request, the firm interrupted production on September 4 to clarify the number of people on board and maintenance activities.

Afterward, the Brazilian player decided to move forward with inspection and maintenance items scheduled for the coming months, keeping the units in scheduled stoppage, to maximize the operational safety of the asset.

While no resumption date timeline was provided previously, Brava Energia has now included its estimated timeframe for the production restart at the Papa-Terra, currently expected to be in early December 2024. This field, which is part of the BC-20 concession and located at a water depth of 1,200 meters, started operating in 2013.

The field’s oil is produced through two units, the P-61  tension leg wellhead platform (TLWP) and the FPSO  P-63, where all the production is processed. Constellation recently signed an agreement to sublet the Alpha Star rig for 30 days during the ongoing contract with Brava Energia, which enabled the rig to work on the Papa Terra field.