Brazil oil company QGEP: Manati field to reach full output in 4Q - World Oil
Brazil oil company QGEP: Manati field to reach full output in 4Q
BY JEFF FICK
RIO DE JANEIRO -- Brazilian oil and natural-gas company QGEP Participacoes SA expects its Manati offshore natural-gas field to return to full production in the fourth quarter, Chief Executive Jose Augusto Fernandes said Thursday.
The Manati field should reach its full output of 6.5 million cubic meters of natural gas per day in the fourth quarter, Fernandes said during a conference call with analysts. In addition, future maintenance work at the field should not affect production.
"During 2012, all of the wells at Manati will be in production," Fernandes said. "The outlook is that the planned maintenance work will not bring any kind of reduction in output expected next year."
Manati, Brazil's largest nonassociated natural-gas field, is the company's lone source of revenue. QGEP is the field's largest stake holder at 45%. Two additional wells came back onstream in early November, with output reaching 6 million cubic meters of natural gas on Wednesday.
While QGEP is interested in expanding its exploration portfolio after raising 1.5 billion Brazilian reais ($853 million) in an initial public offering earlier this year, the company is not interested in buying the local assets of El Paso Corp. that the U.S. company is currently attempting to sell. El Paso wants to sell its oil-and-gas exploration assets as part of the company's $21 billion sale to El Paso to Kinder Morgan Inc.
"The El Paso assets we don't see as very interesting because they appear very similar to what we already have," Fernandes said. QGEP wants to diversify its portfolio, the executive added.
Meanwhile, QGEP Chief Financial Officer Paula Costa said the company had built a $70 million hedge against the recent depreciation of the Brazilian real against the U.S. dollar. The real's nearly 19% decline against the greenback in the third quarter has hit Brazilian companies hard, including playing a part in QGEP's BRL3.5 million third-quarter loss. The hedge will help the company control its foreign-exchange exposure related to QGEP's $158 million purchase of a 30% stake in the BS-4 exploration block from Royal Dutch Shell PLC, Costa said.
QGEP, an arm of local engineering and construction firm Queiroz Galvao, is Brazil's fourth-largest oil and natural gas producer behind Petroleo Brasileiro SA, Shell and Chevron Corp.
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