Annual
report
2022
The fully integrated
onshore Brazilian oil
and gas producer
IMPORTANT INFORMATION
This Report has been prepared by Seacrest Petroleo Bermuda
Limited (“Seacrest Petroleo“ or the “Company”) exclusively for
information purposes.
Statements in this Report, including those regarding the possible
or assumed future or other performance of the Company or its
industry or other trend projections, constitute forward-looking
statements. Forward-looking statements concern future circum
-
stances and results and other statements that are not historical
facts, sometimes identified by the words “believes”, “expects”,
“predicts”, “intends”, “projects”, “plans”, “estimates”, “aims”, “fore
-
sees”, “anticipates”, “targets”, and similar expressions. By their
nature, forward-looking statements involve known and unknown
risks, uncertainties, assumptions and other factors because they
relate to events and depend on circumstances that will occur in
the future, whether or not outside the control of the Company.
Such factors may cause actual results, performance or develop
-
ments to differ materially from those expressed or implied by
such forward-looking statements. Accordingly, there can be no
assurance that such forward-looking statements will prove to be
correct. You should not place undue reliance on forward-looking
statements. They speak only as at the date of this Report, and the
Company does not undertake any obligation to update these
forward-looking statements if not required to do so for regulatory
purposes. Past performance does not guarantee or predict future
performance. Moreover, the Company and its affiliates, and its and
their respective directors, officers, employees and agents, do not
undertake any obligation to review, update or confirm expecta
-
tions or estimates or to release any revisions to any forward-looking
statements to reflect events that occur or circumstances that arise in
relation to the content of this Report.
Neither the Company nor any of its affiliates, or its or their respective
directors, officers, employees or agents, makes any representation or
warranty, express or implied, that any transaction has been or may
be effected on the terms or in the manner stated in this Report, or at
all, or as to the achievement or reasonableness of future projections,
management targets, estimates, prospects or returns, if any.
This Report shall not be construed as a prospectus or an offer to
sell, or a solicitation of an offer to buy, any security or any business
or assets, nor to enter into any agreement or contract with any
recipient of the Report or any other person, and nothing contained
herein shall form the basis of, or be relied on in connection with, any
contract or commitment whatsoever. In particular, it must not be
used in making any investment decision. In accordance with the
above, this Report does not constitute, and should not be construed
as, an offer to sell or the solicitation of an offer to buy any security in
the United States or any other jurisdiction, and there will not be any
sale of securities in any state or jurisdiction in which such offer, solic
-
itation or sale would be unlawful prior to registration or qualification
under the applicable securities laws of such state or jurisdiction. This
Report is not intended for distribution to, or use by, any person in
any jurisdiction where such distribution or use would be contrary to
local laws or regulations.
This Report may include non-Generally Accepted Accounting
Principles (GAAP)/ International Financial Reporting Standards
(IFRS) financial measures. The Company presents non-GAAP/IFRS
measures when it believes that the additional information is useful
and meaningful to investors. Any non-GAAP/IFRS financial measures
contained in this Report are not measures of financial performance
calculated in accordance with GAAP/IFRS and should not be
considered replacements or alternatives to net income or loss, cash
flow from operations or other GAAP/IFRS measures of operating
performance or liquidity. Non-GAAP/IFRS financial measures should
be viewed in addition to, are not intended to be a substitute for,
and should not be considered in isolation from, analysis of the
Company’s results reported in accordance with the accounting
practices adopted by the GAAP/IFRS, as issued by the Financial
Accounting Standards Board (FASB)/International Accounting
Standards Board, as applicable. Notwithstanding these limitations,
and in conjunction with other accounting and financial information
available, the Company’s management considers such non-GAAP/
IFRS financial measures reasonable indicators for comparisons of
the Company against the Company’s principal competitors.
This Report speaks only as of the date set out on its cover. There
may have been changes in matters that affect the Company and
its subsidiaries (the “Group”) subsequent to the date of this Report.
Neither the delivery of this Report nor any further discussions of the
Company with any of the recipients shall, under any circumstances,
create any implication that there has been no change in the affairs
of the Group since such date. The Company does not undertake any
obligation to amend, correct or update this Report or to provide any
additional information about any matters unless required to do so
for regulatory purposes.
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Seacrest Petroleo
5
Company in brief
5
The fully integrated onshore Brazilian oil and gas
producer
6
History and structure
7
Year in brief
9
Letter from the CEO
10
Strategy
11
Assets and operations
14
Market and outlook
16
Sustainability
18
Introduction
19
Health and Safety
21
Climate and the Environment
22
People
24
Local Communities
25
Business Conduct
26
Governance
27
Board of Directors’ report
28
Board of Directors
32
Executive management
33
Corporate Governance
35
Reporting on payments to governments
43
Financials
44
Consolidated financial statements
45
Parent company financial statements
81
Statement of Reserves
95
Responsibility statement
96
Alternative Performance Measures
97
Independent Auditor’s report
99
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Seacrest Petroleo in brief
Seacrest Petroleo is an independent oil and gas production company with an integrated portfolio of producing oil fields and export
infrastructure onshore in Espírito Santo, Brazil. The Company has exclusive control over its infrastructure, all the way from field
production to the offshore tanker loading terminal, allowing for cost-effective operations, and enabling direct access to markets for
its premium grade products.
High quality assets
Considerable reserves with significant
organic upside potential. Proven success in
Brazil with a top-performing execution team
and the backing of industry leaders Seacrest
Group and Mercuria
Fully owned infrastructure
Large-scale infrastructure enables the
Company to process, transport and deliver our
oil production directly to sea tankers through a
uniquely integrated system providing control
and risk mitigation
Potential for growth
Significant ramp up of production expected
through simple, low-risk workovers, recom-
pletions and drillings
High margin barrels
Cash-generative business with potential
for growth and significant free cash flow
generation.
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Seacrest PetroleoSeacrest Petroleo | Company in brief
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The fully integrated onshore
Brazilian oil and gas producer
Seacrest Petroleo is an independent oil and gas producer focused on the redevelopment of midlife
onshore producing oil and gas fields. The Company’s assets are onshore in Espírito Santo, Brazil and
represent a cohesive set of attractive producing fields, interconnecting pipelines and an integrated export
terminal. The assets were acquired at attractive prices in the divestment program run by Brazil’s national
oil company, Petróleo Brasileiro S.A. – Petrobras.
The portfolio consists of the Cricaré Cluster and the adjacent Norte
Capixaba Cluster. The Cricaré Cluster is owned 100% and operated
by the Group and was acquired in December 2021. In February
2022, the Group entered into a purchase agreement with Petrobras
for the acquisition of a 100% interest and operatorship of the Norte
Capixaba Cluster and the waterway Terminal Norte Capixaba. This
transaction closed on 12 April 2023.
The fields have an estimated oil and gas volumes in place of 1.2
billion barrels of oil equivalents (bnboe) and certified proven and
probable reserves (“2P”) of 140 million barrels of oil equivalents
(mmboe) as of 31 December 2022. Q4 2022 production was approx-
imately 6,500 barrels of oil equivalents per day (boe/d) (including
Norte Capixaba) and is forecast to triple by 2025. The Company
has exclusive control over its infrastructure, all the way from field
production to the offshore tanker loading terminal, allowing
for cost-effective operations and direct access to markets for its
premium grade products. Approximately 90 per cent of the fields’
production is of a quality that qualifies it as fuel oil, without the
need for refining.
Seacrest Petroleo has a seasoned management team and organ-
ization of 103 employees with proven operational, technical and
commercial track-record in Brazil, backed by Seacrest Group and
Mercuria, combining a disciplined capital allocation strategy with
expertise in revitalising mid- and late-life fields.
Our commitment
With the commitment to deliver maximum value to its investors,
Seacrest Petroleo combines high productivity, ESG best practices
and financial discipline, striving for organic growth and develop-
ment of its acquired assets, always focused on efficiency and value
creation.
1.2
Oil & gas in place (bnboe)
29%
Target recovery factor
140
2p reserves
(mmboe pro forma)
1,2
6,500
Production per Q4 2022
(boe/d pro forma)
1
Including the Norte Capixaba transaction
2
Competent Person’s Report by DeGolyer and MacNaughton
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Seacrest PetroleoSeacrest Petroleo | The fully integrated onshore Brazilian oil and gas producerSeacrest Petroleo | The fully integrated onshore Brazilian oil and gas producer
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History and structure
Seacrest Petroleo was established by the co-founders of Seacrest Group, Erik Tiller
and Paul Murray, in 2019. The founders had experience from establishing OKEA
ASA in 2015, focusing on the redevelopment of mid-life assets on the Norwegian
shelf. OKEA ASA undertook a public offering on the Oslo Stock Exchange in 2019.
The Group is following a similar strategy in Brazil. Prior to the incorporation of the Company, Seacrest
Group had analysed seven upstream projects in Brazil to find the right match for its capabilities as an
independent oil and gas producer. Seacrest Petroleo acquired the Cricarè Cluster from Petrobras in
partnership with a highly regarded local team in 2020. The Cricarè Cluster comprises a 100% working
interest in 27 fields which the Company started operating in full from 2022. In February 2022, the
Company entered into a purchase agreement with Petrobras for the acquisition of the Norte Capixaba
Cluster, which comprises four onshore oil and gas concessions with related oil and gas production
assets, in addition to an export terminal operated by a subsidiary of Petrobras. The transaction closed
on 12 April 2023, with the Company assuming full operations thereafter. After giving effect to the acqui-
sition of the Norte Capixaba Cluster, the Company will be the third larges onshore oil and gas producer
in Brazil.
On 23 February 2023, Seacrest Petroleo listed on Euronext Expand Oslo under the ticker “SEAPT”. The
initial public offering (IPO), which raised USD 260 million (including a 10% greenshoe), provides access
to Norwegian and international capital markets, a diversification of the Company’s ownership structure
and a portion of the capital required to finance the Norte Capixaba acquisition.
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Seacrest PetroleoSeacrest Petroleo | History and structureSeacrest Petroleo | History and structure
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1
Total price per effective date including up to $118m contingent payments at NPV10
2
Total price per effective date including up to $66m contingent payments at NPV10
2019
Cricaré
Operational transition
Norte Capixaba
acquisition completed
Cricaré signing
$155m ($2.8/bbl)
Norte Capixaba signing
$528.5m ($6.1/bbl)
IPO
$260m share issue
Petrobras process launched
Divestment of non-core assets
Norte Capixaba negotiated
Consolidating synergistic
production clusters and
best-in-class infrastructure
Cricaré negotiated
During an attractive
down-turn in the market
Analysed and bid
On several assets
Norte Capixaba
Operational transition
Seacrest Petroleo formed
To bid in the Petrobras
divestment program
2020 2021 2022 2023
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Seacrest PetroleoSeacrest Petroleo | History and structureSeacrest Petroleo | History and structure
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Successful operational takeover at the
Cricaré Cluster in January 2022
Agreement with Petrobras to acquire the
Norte Capixaba Cluster in February 2022
Formed a consortium with Imetame and EnP
to bid for the ES-T-528 exploration block in April
2022, with subsequent award
Raised daily production at Cricaré 2.6x to an average
of more than 1.800 boe/d in the fourth quarter of 2022
Increased the active well count at Cricaré 1.7x to 151
wells by the end of the fourth quarter, with the wells
producing 80% more than forecast
Added 45 mmboe of incremental 2P
reserves to the reserve portfolio through
well-by-well inventory reviews
Certified 2P target recovery rate of
29% for the gross portfolio, including
Norte Capixaba
Revenues of USD 33.6 million, net loss of USD 119.2 million,
with significant resources spent on developing Cricaré and
preparing for the complation of the Norte Capixaba acquisition
Q4 22Q3 22Q2 22Q1 22
1 838
1 603
1 213
834
Q4 22Q3 22Q2 22Q1 22
151
131
111
90
2P
Split
2P
YE 22
Additions22
Production
2P
YE 21
NC
Cricaré
45 140
3
97
Avg Production Cricaré
(boe/d)
2P Reserve Development
1
(mmboe)
Number of active wells Cricaré
1
Including the Norte Capixaba acquisition
2022 highlights and key figures
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Seacrest PetroleoSeacrest Petroleo | Year in brief
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Michael Stewart
CEO, Seacrest Petroleo
Letter from
the CEO
Seacrest Petroleo is finally ready to assume its role
as the third largest onshore E&P company in Brazil.
Having been formed in 2019 specifically to take part in Petrobras’
divestment program, we are celebrating our first full year of oper-
ations at the Cricaré Cluster and the agreement to take over the
Norte Capixaba Cluster. Moreover, this first Annual Report follows
our successful IPO on Euronext Expand Oslo where we raised
USD 260 million of proceeds to finance our journey as Brazil’s
third largest onshore E&P company.
Excellent operational performance
After a year of preparations, Seacrest Petroleo assumed full
operational responsibility at the Cricaré Cluster in January 2022.
This has been a substantial achievement for our dedicated and
skilled team, where we have managed to raise daily production
levels from less than 700 boe/d in January 2022 to more than
1,800 boe/d on average for the fourth quarter of 2022, with a peak
well above 2,000 boe/d in October and November, before the rain
season affected production in December.
We have increased the number of active wells from 90 wells at
the start of the year to 151 at the end of the year with the average
well producing 80% more than predicted. Following the
higher-than-expected well productivity, a detailed well-by-well
inventory resulted in an increase in net 2P reserves at our fields of
45mmboe.
Norte Capixaba acquisition
We successfully bid for the Norte Capixaba Cluster in December
2021 and signed a binding agreement to take over the cluster
from Petrobras in February 2022. With a total consideration of
USD 528.5 million, significant efforts were made during the year
to secure financing for the USD 35.85 million deposit and for the
USD 425 million consideration to be paid on completion of the
acquisition, which took place on 12 April 2023. At the same time,
operational resources were dedicated in preparation for the take-
over of operations. The Norte Capixaba transaction consummates
our efforts to establish a fully integrated onshore E&P company
with well-to-terminal infrastructure comprising pipelines, treat-
ment stations and an export terminal. Based on our experience
at the Cricaré Cluster and the excellent potential for synergies
between the two clusters, we are excited about our prospects.
Fostering a strong corporate culture
The Seacrest Petroleo organisation now numbers more than 100
employees and, together with nearly 500 contractor personnel,
we are well positioned to deliver on our ambitions to significantly
increase production and recovery rates at our fields. We are happy
to have delivered excellent health & safety performance during the
year with no major incidents of harm to people or the environment.
Taking care of our local communities
Seacrest Petroleo has a broad ESG agenda and aims to be a
low-emission and safe producer of oil & gas. Our focus during
2022 has been on developing strong relationships with the local
communities where we operate. In addition to providing jobs and
paying taxes, we are actively involved in supporting educational
initiatives for our communities.
IPO and listing on Euronext Oslo Børs Expand
In February 2023, we successfully raised USD 260 million in an IPO on
Euronext Expand Oslo. We welcomed a significant number of new
shareholders on board who support our growth journey, while we
greatly appreciate the support from our long-term partner, Mercuria.
With the IPO and subsequent refinancing of our debt facilities,
Seacrest Petroleo is now fully funded for its growth ambitions.
While the regulatory and political landscape in Brazil can some-
times be challenging to navigate, we enjoy a strong combination
of attractive resources and the support of a favourable regime
for oil & gas production. With the Norte Capixaba transaction
completed, our growth journey truly begins!
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Seacrest PetroleoSeacrest Petroleo | Letter from the CEOSeacrest Petroleo | Letter from the CEO
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Strategy
Attractive value chain positioning
The oil and gas industry can be divided into upstream activities
(exploration and production), midstream (processing, storage
and transportation) and downstream activities (refining and
marketing). With no exploration exposure, Seacrest Petroleo is
focused on the up- and midstream parts of the oil & gas value
chain and has exclusive control over its infrastructure, stretching
from field production to an offshore tanker loading terminal,
allowing for cost-effective operations and direct access to markets
for its premium grade products.
Accelerated organic growth profile
The fields in the Cricaré and Norte Capixaba clusters have been
operational for decades and were divested by Petrobras as part of
its efforts to focus on offshore oil & gas production. With a current
average 17% recovery factor, these clusters are in the production
stage and are considered midlife assets.
The recovery factor is the ratio between the
amount of oil or gas expected to be recov-
ered from a field and the estimate of oil or
gas originally in place. Current low recovery
factors provide further upside in recover-
able oil and gas reserves.
The fields have been underinvested for a long time and the
strategy of Seacrest Petroleo is to raise production and the ulti-
mate recovery rate from the fields through various well-related
initiatives. The Company has organized its development activities
into four main initiatives:
• Maintain existing production
Proved developed and producing reserves are currently esti-
mated at 18 mmboe
• Execute on the backlog of maintenance
Reopening and/or upgrading the pump technology for 211 wells
and revamping facilities closed due to lack of maintenance
by Petrobras, coupled with the restarting of steam injection
programmes
• Low-risk mature redevelopment
Drilling new in-fill oil wells, starting recompletion wells in
secondary intervals, and expanding existing steam injection
programmes to new areas
• Upsides
Additional drilling, steam programmes, and associated gas
projects in the adjacent areas with potential to unlock addi-
tional reserves
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Seacrest PetroleoSeacrest Petroleo | StrategySeacrest Petroleo | Strategy
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Seacrest Uniquely Owns 100% Of The Underlying Fields And Infrastructure From Reservoir To Export Terminal
Upstream Midstream Downstream
2. Treatment Stations 3. Storage 4. Export Terminal1. Cricaré and Norte
Capixaba Fields
O&G Industry Value Chain
Exploration Production Port MarketingAppraisal Storage RefiningProcessing
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The target is to increase the recovery rate to 29% from the current 17%, which would
unlock approximately 140 mmboe in 2P reserves and more than triple current daily
production in the next 3-5 years.
Seacrest Petroleo intends to leverage the existing facili-
ties in place, which provide significant processing, storage
and offload capacity to serve the future production
growth with only minor upgrades required.
The Company also intends to leverage the synergies it expects to generate by inte-
grating the infrastructure of the Cricaré and Norte Capixaba Clusters. For instance, oil
produced in some fields in the Cricaré Cluster will be treated in Norte Capixaba facilities
to optimise logistics and existing production capacity. Additionally, the Company
expects that its ownership of the export terminal, with its storage and export capabili-
ties, will provide more flexibility in its operations and allow it to leverage opportunities
for marketing oil and capture higher margins from its operations through a “trading
around the asset” strategy.
In the longer term, Seacrest Petroleo plans to return
capital to shareholders as dividends as production
ramp-up increases.
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Assets and operations
Our integrated and synergistic assets in Espírito
Santo, Brazil offer a unique opportunity for growth
The portfolio consists of the Cricaré Cluster and the Norte
Capixaba Cluster. The Cricaré Cluster is 100% owned and oper-
ated by Seacrest Petroleo and was acquired in December 2021.
In February 2022, Seacrest Petroleo entered into a purchase
agreement with Petrobras for the acquisition of a 100% interest
and operatorship of the Norte Capixaba Cluster and the waterway
Terminal Norte Capixaba (TNC). The transaction closed on 12 April
2023, with the Company assuming full operations thereafter.
The Cricaré Cluster started operations in 1973 and is expected
to remain in operation until 2050. The production is sent from
the treatment stations to the TNC using a combination of trucks
and the Company´s own pipelines. The Cricaré Cluster assets
are among the oldest of Petrobras’ divested assets, with only a
13% recovery factor as of 31 December 2021, which reflected of
Petrobras’ lack of focus on the cluster.
In contrast to some of the other mature onshore fields divested by
Petrobras, the Norte Capixaba wells and facilities are in excellent
condition and well maintained, with new wells being drilled as
recently as in 2020. The TNC is also well maintained, with Petrobras
having performed significant maintenance in 2021 and 2022.
As of 31 December 2022, the Company’s pro forma proven
reserves (“1P”) were estimated to 85.5 mmboe (7.7% gas), of which
26.8 mmboe are located in the Cricaré Cluster and 58.7 mmboe
in the Norte Capixaba Cluster. The Group’s pro forma 2P reserves
were estimated to 139.6 mmboe (6.6% gas), of which 55.9 mmboe
are located in the Cricaré Cluster and 86.7 mmboe in the Norte
Capixaba Cluster.
1.2
Oil & gas in place (bnboe)
29%
Target recovery factor
140
2p reserves
(mmboe pro forma)
1,2
6,500
Production per Q4 2022
(boe/d pro forma)
1
Including the Norte Capixaba transaction
2
Competent Person’s Report by DeGolyer and MacNaughton
São Mateus
TNC
EFAL
ESM8
FSL
FSRL
EFC
ELS
ERI
N
S
EW
0 5 10 Km
Cricaré Cluster
Norte Capixaba Cluster
Oil Pipeline
Gas Pipeline
LEGEND
BRAZIL
South
Atlantic
Ocean
Brazil
Bolivia
Peru
Argentina
Paraguay
Uraguay
Venezuela
Rio de Janeiro
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Seacrest PetroleoSeacrest Petroleo | Assets and operationsSeacrest Petroleo | Assets and operations
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Cricaré Cluster Norte Capixaba Cluster
1
Terminal Norte Capixaba
1
27 onshore fields
151 active wells
4 onshore fields
131 active wells
500K BBL storage capacity
1.8K barrels of oil & gas
produced per day
5.2K barrels of oil & gas
produced per day
DIRECT ACCESS to domestic
and international oil markets
1
Acquired on 12 April 2023 with effective date of 1 July 2022
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Market and outlook
Macro environment
World energy consumption has steadily increased since the
industrial revolution, a trend which is expected to continue in
the medium term. Fossil fuels continue to supply around 82%
of the world’s primary energy. Oil is the largest energy source,
meeting 31% of the world’s energy consumption, while natural gas
accounts for 24% and coal for 27%.
The world’s consumption of primary energy, including oil, natural
gas, coal, nuclear, hydro power and other renewable energy,
increased by 5.2% in 2021. Global oil consumption increased by 5.3
mmboe/d or 5.8% in 2021.
South and Central America combined held a total of 18.7% of
the world’s oil reserves in 2022. Brazil is the largest oil producer,
producing more than half of the total production of the continent
with nearly 3 mmboe/d. Columbia and Venezuela are the second
and third largest, with 738,000 and 654,000 boe/d, respectively.
Oil prices
As evidenced by the price changes in recent years, the oil price
is highly dependent on the current and expected future supply
and demand of oil. As such, it is influenced by global macroeco-
nomic conditions and may experience material fluctuations on
the basis of economic indicators and economic events as well as
geopolitical events. Historically, oil prices have also been heavily
influenced by organisational and national policies, most signifi-
cantly the formation of OPEC and subsequent production policies
announced by the organisation. The figure below shows the Brent
oil price development from 1 January 2000 to 31 December 2022.
Distribution of proven
world oil reserves 2021
WorldAfricaS. & Cent.
America
Middle
East
Europe & CISNorth
America
Asia Pacific
36
7
22
24
18 17
9
28
6 6 4
7
94
90
Consumption
Production
World oil consumption and production by region, 2021
(mmboe/d)
Source: BP Statistical
Review of World
Energy 2022
Source: BP Statistical Review
of World Energy 2022
North America
S. & Cent. America
Europe & Eurasia
Middle East
Africa
Asia Pacific
48.3%
9.2%
18.7%
14.0%
7.2%
2.6%
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50
100
150
20232022202120202019
Source: FactSet oil price data.
Brazilian oil and gas operations
Brazil is the ninth-largest liquid producer in the world and the
largest producer in South America. Brazil’s economy has expe-
rienced significant growth in the last decade, which has led to a
growth in total energy consumption of around 29%. In 2021, Brazil
was the ninth-largest energy consumer in the world and petro-
leum and natural gas represented 47% of Brazil’s domestic energy
consumption.
The competitive situation in Brazil is characterised by state-con-
trolled Petrobras as the dominant player. In addition, there was a
surge of large companies entering Brazil on the back of very large
discoveries in the 2000s including ExxonMobil, Equinor, Shell and
Galp. Seacrest Petroleo is the third largest onshore oil and gas
producer in Brazil.
Brazilian regulatory environment
The regulatory framework in Brazil is considered favourable to oil
& gas producers, especially due to low royalties and income taxes
on oil production, compared to similar countries. The Sudene tax
benefit, which is applicable to projects located in north-east Brazil,
including Cricaré and Norte Capixaba, will reduce the Group’s
Brazilian income taxes from 34% to 15.25% for a period of 10 years,
from 2023 until 2032.
In February 2023, the Brazilian authorities enacted a 9.2% tempo-
rary export tax on crude oil effective from 1 March 2023 until
30 June 2023. It is unclear whether such tax will become perma-
nent. The tax is not expected have an impact on the Group’s
revenues during 2023.
Outlook
Seacrest Petroleo’s ambition is to create value through two main
drivers. Firstly, to increase the Company’s reserves through the
reopening of wells and production efficiency to achieve a higher
recovery factor. Secondly, to scale up production in a favourable
oil market and leverage our operations and infrastructure. For the
full year 2023 Seacrest Petroleo expects to produce an average of
8,5-9,000 boe/d, reaching a highpoint of more than 10,000 boe/d
in the third and fourth quarters.
The Company intends to reopen an additional ~125 wells
throughout 2023, reaching a total operational well count of more
than 400 compared to 151 at the start of the year.
Brent oil price, daily from 1 January 2019 to 31 March 2023
USD per barrel
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Introduction
Seacrest Petroleo was established in 2019. In the following year, the Company underwent a gradual expansion
of the organization to prepare for the assumption of full operations of the Cricaré Cluster, which was effective
from January 2022. In parallel, substantial management resources were allocated to negotiating and
completing the Norte Capixaba acquisition during the year. The Company’s sustainability-related efforts are,
as a consequence, at an early stage, reflecting the short corporate and operating history. Seacrest Petroleo
nevertheless has significant ambitions within sustainability relating to energy use and efficiency, greenhouse
gas emission reductions, health and safety, workforce diversity and inclusion and responsiveness to local
communities. The Group’s corporate governance and business conduct framework has been set up to achieve
this.
Strategy and business model as
a context to sustainability
The fields in the Cricaré and Norte Capixaba clusters have been in
operation for decades and were divested by Petrobras as part of
its efforts to focus on offshore oil & gas production. The fields have
been underinvested for a long time and the strategy of Seacrest
Petroleo is to increase production and the ultimate recovery rate
from the fields through various means such as re-opening and
maintenance of existing wells, drilling new infill wells and starting
well recompletions, as well as steam injection programmes.
Combined, the target is to increase the ultimate recovery rate
to 29% from the current 17%, which would unlock around 140
mmboe and more than triple current daily production in the next
3-5 years.
The Company owns all related infrastructure in and from the fields,
consisting of pipelines and treatment facilities. This transports the oil
to the Norte Capixaba Terminal, which is fully owned by the Company
and consists of storage facilities and export facilities through an
offshore buoy. The infrastructure was developed by the previous
owner, Petrobras, with an estimated investment of USD 1 billion.
With all infrastructure already in place, the Group enjoys a favour-
able cost position and is able to operate with lower emissions and
risk of spills and environmental damage, compared to conven-
tional large-scale developments onshore or offshore.
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Material factors
An initial review of material issues relevant to the Company has
been undertaken based on internationally recognised frame-
works such as SASB and S&P Global frameworks. These guidelines
for the Company’s strategy and efforts within sustainability going
forward are summarised in the table below:
Key topics Material factors
Climate
GHG emissions
Climate transition risk
Physical climate risk
Business model resilience
Environment
Air quality and pollution
Water and wastewater management
Waste and recycling
Ecological impacts
Social
Human rights and community relations
Employee health & safety
Working conditions and employee conditions
Governance
Business ethics
Legal and regulatory environment
Critical incident risk management
As a starting point the Company has focused on developing a
solid framework for business ethics and developing a good health
& safety culture and performance.
Key topics Material factors
No accidents
Critical incident management, ecological
impacts, employee health and safety, business
model resilience
No harm to people
Human rights and community relations, employee
health & safety, customer health & safety
No damage to the
environment
GHG emissions, climate risk, air quality /
pollution, water and wastewater management,
waste and recycling, ecological impacts
No wrongdoings
Working conditions and employee practices,
business ethics, legal & regulatory environment
As the Company grows and develops, the overall sustainability
framework will be broadened and made more detailed. Key to
this will be to develop group wide systems to track and monitor
parameters related to health & safety, environmental and climate
impact, as well as breaches of the ethical framework for the
Company
Governance and risk management
The Management and the Board are responsible for ensuring
that the Company conducts its business with integrity and with
due focus on sustainable and responsible operations and that
it applies principles for sound corporate governance. The Board
holds the highest authority in the Company’s decision-making
hierarchy to approve matters of significance. The Company is
committed to conducting business in a fair, ethical and trans-
parent manner by adhering to the principles and guidelines
stated in the Company’s code of conduct.
Seacrest Petroleo has a risk management procedure formulated
in its Business Continuity Plan and Policy. This policy is focused on
managing unforeseen operational incidents, such as storms, fires,
water damage or significant technological failures.
The Company intends to establish a wider risk management
system to manage its growing operations.
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Health and Safety
Seacrest Petroleo follows the principles of “no harm to people” and “no accidents”. Maintaining good health &
safety performance is essential to operate and integral to attracting and retaining a skilled workforce, as well
as to continuously maintain good relations with the local communities where we operate. Seacrest Petroleo is
subject to strict health and safety regulations in Brazil, as well as evolving industry standards and international
conventions. The impact of breaching such regulations may be material.
Policies
Seacrest Petroleo has a Health, Environment and Safety Policy,
reflecting its commitment to operate responsibly and securely
and to never compromise on the Group’s standards for health,
safety and the environment. Among other things, the Policy
reflects the Company’s commitments to:
• Comply with or exceed legal requirements and other
requirements
• Define objectives and goals that lead to improvements
• Support and train staff and ensure their competence in HSE
matters
• Manage the risks associated with contractors
• Report, investigate and learn from any accidents or near misses
• Routinely inspect workplaces and to audit systems and
processes
• Look for ways to improve our performance
Everyone involved with Seacrest Petroleo has the responsibility to
comply with this Policy and to assist in its execution.
The Company is satisfied with its health and safety performance
during 2022, its first year of true operations. The focus for 2023 will
be on strengthening the safety culture to eliminate high potential
incidents and near misses.
HEALTH AND SAFETY
Unit 2022
Employee Hours
Hours worked own workforce # 109 551
Hours worked contractors # 898 349
Total hours worked # 1 007 901
Serious incidents (SI) # 0
Lost time injuries (LTI) # 0
Total recordable injuries (TRI) # 0
Serious incidents rate (SIR) # / mn hrs 0
Lost time injuries rate (LTIR) # / mn hrs 0
Total recordable injuries rate (TRIR) # / mn hrs 0
Total fatalities # 0
High Potential Incidents # 1
Near misses # 3
Restricted workday cases # 0
Medical treatment cases # 0
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Climate and the Environment
Leveraging existing infrastructure for its activities is core to Seacrest Petroleo. With no need for construction
and development activity in the Company’s operations, a substantial source of emissions is removed. Moreover,
onshore oil & gas production is generally lower in emissions than offshore oil & gas and entails reduced oil spill
risk compared to offshore operations. The infrastructure is already in place in developed areas, which implies
lower impacts on the native vegetation and environment.
On the other hand, the risk of environmental impacts, such as oil
spills and leaks, cannot be eliminated. The Company is subject to
strict environmental regulations and permits in Brazil. Seacrest
Petroleo complies with all license-to-operate requirements when it
comes to environmental management, from water management
to GHG emissions and aims to exceed all environmental regulations
through a continuous process of measurement and improvement.
Physical climate risk is a relevant factor for our operations due to
the increased frequency and severity of storms that may result
in production disruptions and damage to equipment and assets.
Longer term transition risks include global carbon emission taxation
schemes, which may have a negative impact on demand for hydro-
carbons or reduce the profitability of our operations, if levied on the
producers. Access to financing may also become more restricted as
lenders may be incentivised away from fossil fuels towards renew-
able energies and the green energy transition in general.
Seacrest therefore takes its climate responsibility seriously and
plans to set clear targets for performance related to carbon emis-
sions to ensure that it delivers a product that is low on emissions
and low on environmental impact.
KPIs and performance management
Seacrest Petroleo is required to track GHG emissions and energy
use related to production, and report this to the ANP (the Brazil
National Petroleum Agency) and the IBAMA (the Brazilian
Institute of Environment and Renewable Natural Resources),
as specified in the environmental licenses for the fields. The
reporting covers both Scope 1 and Scope 2 emissions.
As the Group took over operations at the Cricaré Cluster from
January 2022, there are no prior historical numbers available. For
comparison, the crude oil and petroleum products used refer to
diesel oil used for power generation, while the renewable energy
consumption refers to alcohol-based additives mixed into the fuel.
The Group has engaged with a sustainability consultancy to
expand the reporting structure, and to include other relevant
parameters such as water use, waste, and environmental impacts.
This wider reporting system will be up and running from 2023 and
onwards.
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CLIMATE AND ENVIRONMENTAL PERFORMANCE
Unit 2022
Production Numbers
Oil ‘000 boe 460
Natural gas ‘000 boe 41
Total production ‘000 boe 501
ENERGY
Energy Consumption
Coal and coal products MWh n.a.
Crude oil and petrolum products MWh 6 852
Natural gas MWh 51 838
Other non-renewable sources MWh n.a.
Nuclear products MWh n.a.
Purchased or acquired electricity, heat, steam and cooling from
non-renewable sources MWh 5 045
Total non-renewable energy consumption MWh 63 736
Share of non-renewable sources in total energy consumption % 98%
Renewable energy consumption MWh 1 116
Direct Energy Consumption MWh 59 807
Indirect Energy Consumption (Electricity) MWh 5 045
Total Energy Consumed MWh 64 852
Energy Intensity KWh/boe 129
Unit 2022
GHG EMISSIONS
Scope 1 GHG Emissions
Gross Scope 1 GHG emissions tCO
2
e 42 112
Scope 2 GHG Emissions
Gross location-based Scope 2 emissions tCO
2
e 638
Gross market-based Scope 2 emissions tCO
2
e n.a.
Total GHG emissions (Scope 1 + Scope 2, Location Based) tCO
2
e 42 750
Total GHG emissions (Scope 1 + Scope 2, Market Based) tCO
2
e n.a.
Scope 3 Emissions tCO
2
e n.a.
Spills and leakages
Hydrocarbon spills to the environment - oil # 3
Hydrocarbon spills to the environment - gas # 0
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People
At year-end 2022, Seacrest Petroleo had 103
employees, of which 97 were located in Brazil, six in
Bermuda and one in Norway. At the same date, the
Company also had approximately 500 contracted
personnel, all located in Brazil and engaged in the
Company’s operations.
Access to skilled personnel is key to the success of Seacrest
Petroleo due to its reliance on engineers and specialists within
a wide range of sciences. The Company is committed to recog-
nising diversity and to ensure equal opportunities, including fair
employment conditions.
The Company’s practices include enabling basic education and
health programmes at community level, building community
business partnerships and training of necessary skilled personnel.
These initiatives help elevate society out of poverty by responsibly
producing the essential ingredients for affordable and reliable
energy.
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Local Communities
Seacrest Petroleo recognizes the important role that education
plays in building strong and thriving communities. The Company
is dedicated to supporting local schools through a range of
initiatives aimed at promoting financial literacy and education.
The programmes are carefully planned and executed, and the
feedback received from the local education departments and
community leaders has been overwhelmingly positive. Activities
include:
• Donations to social programmes in nearby communities
• Mentoring programme for 16–26 year-olds, with a focus on
vulnerability, diversity and inclusion
• Education development programme, with a focus on financial
education and literature
• Investments to generate opportunities for local workforce,
contractors and suppliers, which creates economic value and
reduces poverty
The Company is conscious of its role as a major contributor to jobs
creation and tax revenue in the local communities and regards
this as one of its main purposes.
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Business Conduct
Seacrest Petroleo is committed to upholding high ethical standards in all its business activities. All employees
and others performing work for and on behalf of Seacrest Petroleo and/or any of its affiliates are expected to
adhere to all applicable laws and regulations and the Company’s code of conduct, and to demonstrate ethical
behaviour in their business relations and decisions.
Policy framework
• Anti-corruption Policy
• Gifts and Entertainment Policy
• Oversight of Service Providers Policy
• AML and Sanctions Compliancy Policy
• Business Continuity Plan and Policy
The full set of policies are available through the Company’s
website, www.seacrestpetroleo.com.
Seacrest Petroleo has zero tolerance with respect to bribery
and corruption and each group company and all personnel are
required to comply with all relevant anti-corruption and anti-
bribery laws, rules and regulations of all jurisdictions where the
Group has operations.
The Anti-Corruption Policy reflects the Group’s commitment to
conduct business with the utmost integrity and provides the
framework for what is considered responsible conduct in business
and operations. Compliance with all applicable laws, rules and
regulations, including anti-corruption laws, is fundamental. The
Policy applies to the Company’s personnel and all representatives,
business partners, and to all to joint ventures, mergers and acqui-
sitions and other transactions in which the Group participates.
The Chief Compliance Officer (CCO) has responsibility for the
administration of the Anti-Corruption Policy and other compliance
policies and procedures and monitors the compliance with these.
As directed by the CCO or Management, the Group shall under-
take periodic global corruption risk assessments with respect
to its then current and anticipated activities. Management
will ensure that group personnel and representatives
understand and are able to comply with the policies and
procedures through internal and external communication,
including training.
It is the Group’s policy to conduct due diligence on critical
third-party service providers used by the Group prior to their
engagement. Such reviews include the service provider’s
compliance with the terms of agreements in place and assess-
ment of the service provider’s continued suitability and capacity
to perform the activities being outsourced. The Group also
determines whether the service provider maintains adequate
physical and data security controls, transaction procedures,
business continuity and IT contingency arrangements (including
periodic testing), insurance coverage, and compliance with
applicable laws and regulations. Seacrest Petroleo has estab-
lished a reporting channel with partner Contato Seguro for
employees, contractors, and other stakeholders to confidentially
report any concerns or complaints about issues in the corporate
environment.
The Group has a compliance training programme which
comprises regular online training provided by a third party, with
certifications awarded upon approval, as well as weekly newslet-
ters delivered to the operations teams in Brazil.
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