OGX Tumbles on Equipment Failures at Tubarao Field: Rio MoverPeter Millard
OGX Petroleo & Gas Participacoes SA, Brazil’s worst-performing stock this year, slid as much as 10 percent after it said damaged pumps curbed output by 40 percent in July.
OGX, as the Rio de Janeiro-based explorer controlled by entrepreneur Eike Batista is known, was unchanged at 59 centavos at the close in Sao Paulo.
Production at the Tubarao Azul offshore field plummeted to 900 barrels a day in July from 9,700 in June after it shut both of its producing wells, OGX said in a statement yesterday. The company has had problems with the subsea pumps at all three wells at the field this year and has said it may abandon the deposit in 2014 if production isn’t economically viable.
The company is pinning its hopes on the Tubarao Martelo field, also located offshore in the Campos Basin, where it plans to start production before the end of this year to help finance investments and make interest payments on its debt. The company is overhauling its business plan after encountering geology in Campos that impedes the flow of oil and drove the company to abandon some projects it had previously declared commercial.