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OGX Declares Petronas Partnership Oil Field Commercial Amid Rout

OGX Petroleo & Gas Participacoes SA (OGXP3), the world’s worst-performing oil stock this year, declared its Remora offshore field commercial two days after saying its only producing prospect may close next year.

The field, in a block partly owned by Malaysia’s Petroliam Nasional Bhd. off Rio de Janeiro in the southeastern Campos basin, was declared commercially viable according to a statement on the Brazilian oil regulator’s website. The block comprising Remora, known as C-M-499 or BM-C-40, is one of two where Petronas agreed to buy 40 percent stakes on May 8. The second block partly owned by Petronas, known as BM-C-39, was declared commercial in April 2012.

OGX shares have lost more than 50 percent in three days after the oil producer controlled by billionaire Eike Batista said it was closing fields, following missed output targets that have sent the shares plummeting since last year. The slump is extending a 91 percent decline this year, the most of more than 500 oil producers worth at least $100 million, according to data compiled by Bloomberg.

Declaring a field commercial doesn’t ensure that it will be developed. OGX in March said that the Tubarao Tigre, Tubarao Gato and Tubarao Areia fields were commercial and on July 2 said it plans to return the three licenses because it doesn’t have the technology to develop them. OGX also said two days ago that its only producing oil field, Tubarao Azul, may be shut down in 2014.

The sale of stakes in the two blocks to Petronas, along with Batista’s pledge to buy as much as $1 billion of OGX in a put option, will ensure the company will be able to meet its obligations, the Rio-based company said today in a separate regulatory statement.

To contact the reporter on this story: Rodrigo Orihuela in Rio de Janeiro at rorihuela@bloomberg.net

To contact the editor responsible for this story: James Attwood at jattwood3@bloomberg.net

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