Petrobras Starts Output From Tenth FPSO Unit At Lula Project

Brazil's state-run energy giant Petroleo Brasileiro S.A. or Petrobras (NYSE:PBR) declared the commencement of production from the Cidade de Saquarema floating production, storage and offloading (FPSO) vessel at the Lula oil field on Jul 8. It is to be noted that the offshore oil field is situated in the presalt Santos Basin. Most importantly, the Cidade de Saquarema unit is the tenth FPSO that is working in the presalt region of Brazil.

The Lula development comprises nine production wells along with nine injection wells. On Jul 11, the first production well 8-LL-81D-RJS produced at a steady rate of 30,000 barrels per day. The FPSO unit that is being used for the Lula project has the capacity to process 150,000 barrels of oil every day. The vessel is also cable of storing 1.6 million barrels of oil and compressing 6 million m³ of gas each day. Currently, six FPSO units are working in the Lula field.

Petrobras is the operator of the Lula field with an interest of 65%. Royal Dutch Shell (LON:RDSa) plc RDS.A has a 25% stake while the remaining 10% is in the possession of Petrogal Brasil SA.

Headquartered in Rio de Janeiro, Petrobras SA, is the largest integrated energy firm in Brazil and one of the largest in Latin America. The company produces most of Brazil’s crude oil and natural gas and accounts for almost the entire refining capacity of the country.

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Recently, the company posted June production of 2.9 million barrels of oil equivalent per day (BOE/D) – up almost 2% from the prior month. Most importantly, the June output carved the new monthly record after beating the prior figure of 2.88 million BOE/D in Aug 2015.

Currently, the company carries a Zacks Rank #2 (Buy), which implies that the stock will outperform the broader U.S. equity market over the next one to three months.

Some better-ranked players in the energy sector include Chevron Corporation (NYSE:CVX) and Matador Resources Company (NYSE:MTDR) . Both stocks sport a Zacks Rank #1 (Strong Buy).