The interview with the president of PRIO (), Roberto Monteiro, made to Estadão/Broadcast on Tuesday (20), brought some important signs for the oil company.
The company, Monteiro pointed out, generated mixed reactions among market analysts.
The company, which traditionally focuses on the redevelopment of mature fields, now wants to adopt an unprecedented approach when competing for exploration blocks in the pre-salt region. The move was considered strategic and had the potential to unlock value, but it carries uncertainties and risks that raise questions about its impact on future business results.
For Bradesco BBI, participation in the auction represents a notable change in PRIO’s strategy, which has always prioritized investments in assets with proven production. The recommendation is to carefully observe the allocated capital (capex) and the disbursement schedule, as moderate values can signal prudence and good use of the company’s resources.
In other words, the bank’s report points out that the success of this initiative will depend on the balance between risk appetite and maintaining the company’s financial health.
Genial Investimentos considers the decision “interesting”, says it sees “great potential for generating value”, as long as the exploratory campaigns are successful, and maintains a purchase recommendation. According to analysts, the discovery of commercial volumes of oil and gas could considerably multiply the amount invested.
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The problem is that the possibility of failure, such as not finding economically viable reserves, is a factor that cannot be ruled out, especially considering the sunk costs that the company may face.
A new chapter
Participation in the auction is also symbolic, according to the broker. Since its creation, PRIO had not shown interest in exploration blocks, focusing on restructuring assets acquired from other companies. This model, recalls Genial, was one of the factors that helped consolidate Prio’s position in the oil and gas market. With its entry into a more risky segment, the company is betting on diversifying its operations and expanding the scope of its activities, especially in areas close to the assets it already operates.
Analysts consider that the entry into the auction comes at an opportune time, as the above-average cash flow and the company’s current level of debt allow for bolder investments. However, the market is still evaluating how PRIO will deal with the uncertainties inherent to exploratory campaigns, remembering cases of other companies that faced difficulties when investing in similar assets.
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While PRIO begins its first foray into exploratory blocks, it also maintains focus on other relevant projects, such as the operational entry of the Wahoo and Albacora Leste fields. Production from the Tubarão Martelo field, in turn, continues to be impacted by the delay in issuing environmental licenses.
The company’s main target of interest, according to Monteiro in an interview, is the acquisition of the remaining 60% of the Peregrino field, which would result in the consolidation of 100% of the operation under the management of Prio. Based on the amount previously paid for the 40% (approximately US$1.9 billion), Genial estimates that the remaining portion should reach up to US$2.9 billion.
Additionally, the interest of the PRIO in assets in the Gulf of Mexico. However, the broker analyzes that the company’s focus should remain in Brazil, especially considering the recent purchase of 40% of Peregrino and the impact of this acquisition on the projected debt level until the end of this year.
