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Petrobras Announces Initiation of Production at Atapu Field

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PetroleoBrasileiro S.A. or Petrobras (PBR - Free Report) recently announced the commencement of oil and natural gas production at its Atapu pre-salt field. The output will be generated using P-70 floating production, storage and offloading (FPSO) platform in the eastern region of the deepwater Santos Basin near the Búzios field, offshore Brazil.

The P-70 FPSO platform has the ability to churn out 150,000 barrels of oil and nearly six million cubic meters of natural gas daily. The unit will operate at a water depth of 2,300 meters and 200 kilometres from the coast of Rio de Janeiro in order to get connected with up to eight producing wells and eight injector wells.

The Atapu shared deposit, which consists of Oeste de Atapu, Atapu fields and a fragment of the country's noncontracted region, is expected to contribute to production growth in the pre-salt. The Atapu field is jointly run by Petrobras (89.257%), Royal Dutch Shell , TOTAL , PetrogalBrasil S.A. and government-owned PPSA.

Earlier this month, this Rio de Janeiro-basedPetrobras announced plans to sell its stakes in the four offshore oil fields in shallow waters off the coast of Brazil's Ceara state, which are Tuna, Curima, Espada and Xareu. Per management, the plan is in sync with the company’s strategy to cut costs and improve capital allocation. The company, which is a state-run energy giant, is the sole owner of the stakes and plans to sell 100% operating interest in the project.

This latest sales offer is part of the company’s strategy to regain its financial footing by shedding assets and curtailing debt as it continues to tackle nagging issues, which persisted since the breakout of a major corruption scandal years ago. At that time, the company had allegedly accepted bribes from construction firms in return for awarding them contracts at exorbitant prices.

Company Profile

Petrobras is the largest integrated energy firm in Brazil and one of the biggest in Latin America. The company’s activities include exploration, exploitation and production of oil from reservoir wells, shale and other rocks as well as refining, processing, trading and transportation of oil and oil products, natural gas and other fluid hydrocarbons besides other energy-related operations.

Zacks Rank & Key Picks

Petrobras currently carries a Zacks Rank #3 (Hold). A better-ranked stock in the energy space is CNOOC Limited (CEO - Free Report) , which holds a Zacks Rank #2 (Buy) at present. You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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