Petro-Victory Energy Corp. and Eneva have signed a Memorandum of Understanding (MOU) to develop non-associated gas from the São João field in Brazil’s Barreirinhas Basin. This agreement marks a significant milestone for the region’s energy sector.
Currently 100% owned and operated by Petro-Victory, the São João field contains 50.1 billion cubic feet (1.4 billion cubic meters) of non-associated gas, confirmed by a GLJ reserve report in 2023. Eneva will fund the drilling, logging, completion, and testing of a well targeting the Bom Gosto/Arpoador formations at approximately 3 kilometers depth.
Development and Joint Venture Opportunities
The MOU outlines that after the initial drilling phase, Eneva may finance 3D seismic acquisition, processing, and interpretation for the entire field. If Eneva exercises this option, a joint venture (JV) could be formed, with Eneva holding a 72% stake and Petro-Victory retaining 28%. The MOU also stipulates that all activities, including the creation of the JV, will require approval from the Agência Nacional do Petróleo, Gás Natural e Biocombustíveis (ANP) in accordance with regulatory standards.
Impact on the Brazilian Energy Sector
The development of São João’s gas resources is expected to contribute to the diversification of Brazil’s energy supply. Eneva’s proximity to the field provides a strategic advantage for integrating the new resource into its existing portfolio. The initial investment in drilling and potential seismic studies positions Eneva strongly in the domestic gas market.
For Petro-Victory, the agreement represents a chance to advance its gas assets with a seasoned partner while minimizing initial costs. This collaboration could enhance Petro-Victory’s ability to leverage gas resources in a dynamic market.
Market Outlook and Regulatory Considerations
Brazilian regulations will be crucial for guiding the project’s progress. The ANP’s approval is essential for the partnership’s realization and operational deployment. Eneva’s commitment to the first development phase reflects a strong interest in optimizing local gas resources.
The São João field project could influence future partnerships in Brazil’s gas sector, potentially encouraging similar collaborations among industry players.