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The U.S. oil major, Chevron Corporation (CVX - Analyst Report), 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.

The company officials reveal that Chevron is going to start its operation very soon, provided all the precautionary measures are taken.

Chevron holds 52% operating interest in the Frade field. The other operators are Petroleo Brasileiro S.A., or Petrobras (PBR - Analyst Report) 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 (CLMT - Snapshot Report) and Range Resources Corporation (RRC - Analyst Report). Both these stocks carry a Zacks Rank #1 (Strong Buy).

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