PetroRio reschedules debt with Chevron

PetroRio reschedules debt with Chevron

Debt M&A Loans Brazil US Latin America

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Brazilian oil and gas company PetroRio said Tuesday that it reached an agreement with Chevron to delay debt payments from the acquisition of an oil field and a floating, production, storage and offload (FPSO) vessel.

PetroRio owes $142 million on a loan it signed last year to buy 51.7% of the Frade deepwater oil field and a FPSO from Chevron, the company said in a securities filing.

The loan charged 5.82% per year, and PetroRio faced $77 million in loan payments in September this year and around $64 million in March 2021. Now it will pay $15 million in November, $30 million in May 2021 and the remaining $97 million in November 2021 at a rate of 7% per year, according to the filing.

"The new agreement, which was negotiated during the COVID-19 pandemic, significantly improves short- and medium-term liquidity, therefore contributing to a more equalized cash flow and better management of the company's cash position," PetroRio said.

PetroRio increased its stake in the Frade field to 70% through the deal with Chevron. State-owned oil company Petrobras later agreed to sell its 30% stake in Frade to PetroRio for $100 million in December last year.

The Rio de Janeiro-based company first bought a stake in Frade from Japan's Inpex and Sojitz in October 2018. The Frade field started production in 2009 and reached production of 70,000 barrels per day in 2011, before an oil spill halted production. Chevron paid a fine of $41.6 million and restarted production in 2013.

PetroRio said in the filing that cost reductions through land, air and sea logistics synergies had helped reduce lifting costs to $17.30 per barrel.

In February, the company agreed to buy the OSX-3 FPSO vessel for $140 million and a 80% stake in the Tubarão Martelo oil field from Dommo Energia. The Tubarão Martelo field abuts the Polvo field, which is operated by PetroRio, and will allow the company to form an oil field cluster in the Campos Basin.