Posted - By Jeb Blount - Reuters
Brazilian oil and natural
gas producer HRT Participações SA said on Wednesday
that liquefied natural gas is its preferred solution to move gas
from isolated Amazon wells to paying customers.
HRT and its partner in the company's Brazilian operations,
Russia's NK Rosneft' OAO, have signed letters of intent with
Brazil's state-run oil company Petroleo Brasileiro SA, or
Petrobras, to cooperate on projects to "monetize," or
sell gas from the remote and sparsely populated
region.
The LNG plants needed to
chill natural gas to a negative 162 degrees Celsius (negative 260
degrees Fahrenheit) so it can be pumped as a liquid aboard specialized
ships are expensive. LNG's costs, plus large future exploration needs in
Brazil
and Namibia, have prompted the company to look for partners or buyers
for stakes in individual company assets, Chief Executive Milton Franke
said on a conference call with investors.
To help raise the capital needed to finance
such projects and to pay for future exploration and production, HRT
hired investment bank Goldman Sachs Group Inc to find companies
interested in buying a stake in HRT or shares in existing HRT
subsidiaries and other assets. Franke expects Goldman Sachs' efforts to
show results by the end of the year.
A final decision on what options to use in the Amazon could
come as early as this month.
HRT shares, which fell more than 3 percent on Wednesday
morning after the Rio de Janeiro-based company posted a 546
million real ($236 million) second-quarter loss on Tuesday, were
up 5.13 percent to 1.64 reais in the afternoon.
The stock is on track for its highest close in nearly two
weeks and its second-biggest, one-day gain in a month.
While drilling and exploration costs fell, most of the loss
came from charges related to writing off and closing dry and
non-commercial wells.
Franke said it is likely that Rosneft will increase its
stake in HRT Brazil unit to 55 percent as planned and that HRT
will reduce its stake to 45 percent or less. HRT needs to reduce
the risk associated with the large investments needed to fund
new gas exploration and finance the production of the oil and
gas found, he said.
Franke said he is confident Rosneft's share of new capital
needed for the Amazon operations will appear on time.
New drilling in the Amazon could happen in early 2014, he
said.
The company also said its separate HRT Americas unit plans
to complete a third well in Namibia by mid-September. The
Moosehead prospect in the Orange Basin, has a 25 percent chance
of finding commercial quantities of oil, the company said in a
statement, citing Dallas-based oil resource certification
company DeGoyler and MacNaughton.
HRT is drilling Moosehead in partnership with Portugal's
Galp Energia SGPS SA. Two previous wells in Namibia's
offshore Walvis Basin, did not find commercial accumulations of
oil, though they reinforced the company's belief that the
little-drilled frontier basins will eventually be an oil
producing region.
"We remain confident that the Namibia basins contain oil and
gas resources," Franke said.
Ocean.
New partners and investment for future drilling campaigns in
Namibia will probably have to wait until 2014, he said.
"It's hard to find partners to put money into a project in
the middle of drilling."
Post to be found at:
http://www.reuters.com/article/2013/08/14/hrt-results-idUSL2N0GF0WM20130814
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