July 6, 2018 / 7:04 PM / 3 months ago

Brazil's Petrobras seeks partner to revive older oil wells

RIO DE JANEIRO, July 6 (Reuters) - Brazil’s state-controlled oil company Petroleo Brasileiro SA has confirmed that it began searching in May for an oil services company to partner with it in an onshore production-sharing deal.

The project, aimed at boosting oil output in the mature onshore cluster of Canto do Amaro in the Potiguar Basin, was first reported by Reuters in June.

“This is the first time the company is using this business model as a way to increase oil recovery in mature fields,” Petrobras, as the company is known, said in a statement to Reuters late on Thursday.

Based on the results from the project, the company will decide whether to apply this model in other areas, Petrobras said.

The company said the winning company would be responsible for investment and operation and maintenance costs for the wells in the Canto do Amaro cluster. The tender includes a 15-year contract, Petrobras confirmed, adding that it would remain the operator.

A deal would represent a novel way for the debt-laden oil company to boost output from mature fields without losing control or risking capital.

Such a deal would also allow oil services companies to use expensive equipment idled for years during the downturn in Brazil’s oil industry. The sector was hammered by low oil prices and a massive corruption scandal at Petrobras.

Reuters previously reported that Schlumberger and Halliburton Co were both preparing bids for the project. Both companies declined to comment when contacted on Friday.

Petrobras did not say when the winning company will be decided.

Reporting by Alexandra Alper Additional reporting by Liz Hampton in Houston Editing by Frances Kerry

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