Source: Subsea World Magazine
With unprecedented initiatives in the country and technology integration, Enauta intends to build the most balanced upstream portfolio with the highest potential for value generation in Brazil. Learn how in this exclusive interview with Decio Oddone, CEO of the company.
According to Enauta, what are its investment and growth plans in Brazil?
Brazil has good oil and gas production prospects. As the sector has been undergoing transformations, new growth opportunities have arisen for companies like Enauta and we have plans to capitalize on these opportu-nities. As an example, I would like to mention the Atlanta Field, for which we have detailed planning and have contracted suppliers to make the transi-tion from the Early Production System to the Definitive System. The project will receive relevant investments, in-cluding the drilling of new wells, which will start a new Field production stage. Our estimate is to reach about 50,000 barrels per day by 2024. To achieve this, these next two years will be crucial. We have been preparing ourselves hard for this, by choosing the best service providers in the market and by acquiring high-quality equipment. With the Manati Field staying in place, we still have good expectations for natural gas production and cash generation. The energy transition is inevitable, and we believe that there will be coexistence of different types of energy sources for a long time to come. Therefore, we believe in investments in low-cost, low-emission oil and natural gas production. For this reason, in the company’s planning, investments in renewable energies should come later. In addition, we also have good expectations for discoveries in the Sergipe-Alagoas Basin, where we started the first exploratory well.
Many, or almost all, oil exploration and production companies are migrating to renewables, to cleaner energy generation. How is Enauta positioning itself in this transition, either in its operations or as new business possibilities?
We plan to consolidate our company as an independent with the most balanced upstream portfolio and the highest potential for creating value in Brazil. Having done this, we will think about how to invest in renewables. The decision not to complete the deal for the Manati Field is an example of how we see the opportunity to be part of the energy transition. Natural gas production is less environmentally damaging than oil production. We believe that it is essential for companies in the sector to be concerned about the energy transition and the carbon footprint. Diversifying our portfolio is also a matter of sustainability and we believe that companies that do not take this seriously will be left behind.
Why did Enauta decide to stay with the Manati Field? What are the plans? Is there the possibility of a partnership with Gas Bridge for the construction of the gas storage project?
We started negotiations in 2020, but since then the scenario has changed. Today, Manati once again plays an important role in the company’s cash generation, especially considering the high price of gas and the appreciation of the asset. The agreement in ques-tion had been closed in mid-2020, with Gas Bridge, for the sale of 45%, the percentage referring to Enauta’s participation in the field. At the end of 2021, as the necessary conditions were not met, we decided not to continue with the deal. From a strategic point of view, this was an important step. We have revisited some of our plans and this is another decision we have adopted in order to have a more balanced portfolio. Enauta’s goal is to become the independent Brazilian company with the portfolio with the greatest chance of generating value for shareholders. With Manati, we strengthen one of the foundations of our plans, which is precisely cash generation through production assets. The Manati Field, in Bahia de Camamu (BA), is one of the largest gas fields in Brazil. In a country like ours, which is a great importer of natural gas, at the moment in which we live, this asset becomes even more valuable. Besides the cash generation mentioned above, we are analyzing the possibility of an unprecedented initiative in the country, which is to transform it into a reservoir for gas storage. This operation would have as its objective the storage of natural gas to serve the market in times of scarcity. Due to its strategic location and the connection to the gas pipeline network through Salvador (BA), the idea is viable and is being carefully considered. At the moment we are evaluating what is better, to produce until the end of the useful life or to convert for storage.
What were the lessons learned with the Atlanta Early Production System for the Definitive System?
Through the technical knowledge we ac-quired about Atlanta, something that was only possible thanks to the Early Production System, we were able to develop a more reliable, robust, resilient, and sustainable project for the Definitive System. We gathered important information for the elaboration of a more efficient development plan operationally, enabling a significant reduction in investments, with a consequent improvement in profitability. The Atlanta Field is currently Enauta’s main oil production asset. The project already has three wells in production. Others will be drilled starting this year. With the revised schedule, the current forecast is for production with six to eight wells in the first phase of the Definitive System. Recently, we announced the purchase of FPSO OSX-2, which is now called FPSO Atlanta. With this configuration, the fore-cast is to reach about 50,000 barrels of oil per day in 2024.
Will the new FPSO in Atlanta take Enauta to another level? How important is this increase in production for the company’s future?
It will certainly be a very important step for us. The negotiated terms allow the project to have a low breakeven point and an attractive return. With the proj-ect’s approval, Atlanta’s production will reach, as I said, 50,000 barrels of oil per day in 2024, generating signifi-cant value for our shareholders, which is one of our main goals. I would also like to emphasize that the Definitive System project will be pioneering in Brazil in re-lation to the integration of technologies for efficient carbon management.
Enauta has invested a lot in ESG: in the environmental pillar, with emissions reduction, and in the social pillar with diversity. Has this always been an aspect of the company or has it changed with your arrival? What is the impact on the business when you achieve positive results in this area?
These have always been one of the main pillars of the company, which I have been adjusting to the demands of our time. It is part of Enauta’s strategy to consider our impact, however small it may be, on the world around us. It may be small on a global level, but it is relevant in our surroundings. So we try to do our best. ESG is in Enauta’s DNA, even before it became a known acronym or the dissemination of these principles. Besides encouraging portfolio diversification, which helps in financial sustainability, the reduction of greenhouse gas emissions, respect for the environment and people, inclusion, and the generation of opportunities for our employees are part of the company’s main objectives. In 2020, we reduced by 7% the direct emissions in the Atlanta Field, year in which Enauta received a B grade in the CDP, an entity that evaluates carbon emissions by companies, registering an intensity of 15.2 kg of CO2 e/BOE (barrel of oil equivalent). In 2021, we established the restrictive goal of CO2 intensity equivalent to the OGCI (Oil and Gas Climate Initiative) level of 2019, and received, for the sixth consecutive year, the Gold Seal of the Brazilian GHG Protocol Program (PB-GHG), which represents the highest level of qualification provided by the PBGHG, reaffirming our commitment to transparency in emissions data. In addition, we avoid the use of diesel fuel in our operations, consuming gas produced as the FPSO’s primary energy source. I also highlight initiatives such as the optimization of the support fleet and the use of helicopters as good examples. The consolidation of a diverse and inclusive professional environment is part of our strategy. In our team, 40% of the workforce and our leadership is made up of women. A decade ago we published our annual sustainability report, which meets international standards. We are also the first Brazilian company to sign the Sustainable Ocean Principles, which is a United Nations initiative that aims at the sustainable management of the oceans.
On new acquisitions, is Enauta still looking at opportunities in mature offshore and onshore fields? Could you tell us a more details about your plans to acquire new assets?
Enauta is today a company with enough strength and robustness to look for opportunities. Our interest is greater in assets already in production. We constantly look for good op-portunities in the market, keeping the acquisition of new assets on our radar. This is part of our strategy to expand our presence in the market. We believe there are interesting options for independent oil companies in Brazil. First, we will expand oil and gas production. Later on we will evaluate investing in new sources of energy. Our strategy to generate value entails strengthening hydrocarbon production in the short term by acquiring assets in production; implementing the Atlanta SD in the medium term and exploring the blocks we have in Sergipe-Alagoas and the Equatorial Margin further ahead, making our portfolio the most diversified among independent companies operating upstream in Brazil.