Brazilian oil companies will invest almost 8,000 million dollars in onshore fields by 2029

Small and medium-sized oil companies Brazil will invest about 40,000 million reais (7.740 million dollars) in fields on land for 2029according to a survey by the country’s independent association of oil and gas producers, Abpip.

The group, which includes companies such as Eneva and PetroReconcavo, aims to extend useful life and increase production in the onshore oil fields acquired from state company Petrobras in recent years.

The initiative to buy fields from Petrobras has boosted Brazil’s onshore oil and gas industry. Petrobras had shelved some assets after shifting focus to developing its prolific pre-salt fields, Abpip executive secretary Anabal Santos told Reuters.

Purchases from Petrobras have boosted investment, production and taxes, Santos said, arguing that even with the incoming government of leftist Luiz Inácio Lula da Silva, the trend is unlikely to reverse.

Santos said production in onshore basins had been in decline since 2012 and began to increase “substantially” as new companies entered the market.

Production from onshore fields is now expected to rise to 500,000 barrels of oil equivalent per day by 2029, up from 150,000 in 2016, he said.

“We are convinced that common sense will prevail” in the new government, Santos said. “This process (of sale of Petrobras assets) must be expanded in shallow waters,” he argued.

The state firm has already sold some offshore assets, Santos said.

Since Petrobras began its divestment strategy in 2013, it has sold 204 oil field concessions; 165 of which are onshore and 39 offshore.

With the rebound in the onshore industry, more business is expected, the surveyed oil companies believe. In addition to the Petrobras sales, regulator ANP could auction oil areas and private companies could reach agreements.

“We don’t just live off the Petrobras divestment program…we can do acquisitions, partnerships, farm in…we’re just getting started,” Petroreconcavo chief executive Marcelo Magalhaes told Reuters.