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Brazil: Final Investment Decision for Atapu-2 and Sépia-2 Oil Developments

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TotalEnergies (TTE), along with Petrobras and partners, has made the Final Investment Decision (FID) for the second development phase of the Atapu and Sépia fields in Brazil's Santos Basin. The Atapu-2 project will feature a new FPSO unit with a 225,000 bopd capacity, enhancing the current 150,000 bopd production. The Sépia-2 project will also introduce a new-built FPSO with the same capacity, supplementing the existing 180,000 bopd. TotalEnergies holds 15% in Atapu and 16.9% in Sépia. Both FPSOs, expected to start by 2029, are designed to minimize greenhouse gas emissions using advanced technologies.

Positive
  • Final Investment Decision (FID) for Atapu-2 and Sépia-2 indicates strong commitment to future production.
  • New FPSO units will each add 225,000 barrels per day, significantly increasing output.
  • Atapu-2 and Sépia-2 will help maintain TotalEnergies' production above 200,000 boepd in Brazil.
  • Advanced technologies in new FPSOs to reduce greenhouse gas emissions.
  • Brazil seen as a core area for TotalEnergies due to low-emission and low-cost oil resources.
Negative
  • New FPSOs will not start production until 2029, delaying immediate returns.
  • Significant capital expenditure required for new-built FPSO units.
  • TotalEnergies' relatively small ownership stakes (15% in Atapu, 16.9% in Sépia) might limit direct financial benefits.

TotalEnergies' decision to invest in the second development phase of Atapu and Sépia fields is significant for several reasons. Firstly, the scale of production capacity is notable, with each new-built FPSO expected to handle 225,000 barrels of oil per day (bopd). This expanded capacity positions the company to substantially increase its output, which could positively impact its revenue streams in the long term. Additionally, TotalEnergies' share in these fields (15% in Atapu and 16.9% in Sépia) means that any increase in production will directly benefit its bottom line, enhancing shareholder value.

From a financial perspective, these developments also signal a high level of confidence in the profitability of Brazil's pre-salt oil fields. These are some of the most productive and cost-effective oil reserves globally, providing a strong ROI potential. However, the long lead time until production begins (expected in 2029) introduces risks related to oil price volatility and potential regulatory changes. Investors should weigh these factors when considering the long-term impact on TotalEnergies' financial health.

Moreover, the emphasis on minimizing greenhouse gas emissions in the design of these FPSOs indicates a strategic alignment with global sustainability trends, which could attract ESG-focused investors.

The announcement of the Final Investment Decision for Atapu-2 and Sépia-2 is a landmark development in Brazil's pre-salt oil sector. The pre-salt layers refer to deep-sea oil reserves found beneath thick layers of salt under the ocean floor, known for high yield and relatively low extraction costs. These fields are critical to Brazil's position as a major player in the global energy market.

TotalEnergies' involvement, alongside Petrobras and other partners, underscores the collaborative nature of modern oil exploration and production. It also reflects the strategic importance of these reserves in meeting future energy demands. The expected production of 225,000 bopd from each FPSO marks a significant boost in supply, which could have implications for global oil prices, especially if other major producers face disruptions.

The advanced technologies to minimize greenhouse gas emissions are noteworthy. They set a new benchmark for future offshore oil projects and demonstrate an evolving commitment to environmental stewardship within the industry.

From an environmental standpoint, the new FPSOs for Atapu-2 and Sépia-2 incorporate several innovative technologies designed to minimize their ecological footprint. These include an all-electric configuration, waste heat recovery, a closed flare system, cargo oil tank gas recovery and variable speed drives for compressors and pumps. Such measures are important in reducing greenhouse gas emissions, aligning with global efforts to combat climate change.

The planned implementation of these technologies reflects a proactive approach by TotalEnergies and its partners to meet stricter environmental regulations and public expectations. While the production of fossil fuels inherently involves environmental risks, these advancements represent a meaningful step toward more sustainable practices in the industry.

However, it is important to recognize that despite these efforts, the extraction and use of oil still contribute to carbon emissions. Hence, continuous improvement and innovation in sustainability practices will be essential for maintaining social license to operate and meeting international climate commitments.

PARIS--(BUSINESS WIRE)-- Regulatory News:

TotalEnergies (Paris:TTE) (LSE:TTE) (NYSE:TTE), together with the operator Petrobras and their partners in the Atapu and Sépia consortiums, have taken the Final Investment Decision (FID) for the second development phase of Atapu and Sépia fields, located in the prolific pre-salt Santos Basin, offshore Brazil.

The Atapu field has been producing since 2020 through the P-70 Floating Production Storage and Offloading (FPSO) unit, with a production capacity of 150,000 barrels of oil per day (bopd). The second development phase, Atapu-2, will comprise a new-built FPSO of 225,000 bopd capacity. TotalEnergies owns an interest of 15% in the Atapu field, in partnership with Petrobras (65.7%, operator), Shell (16.7%), Petrogal (1.7%) and PPSA (0.9%).

The Sépia field has been producing since 2021 through the Carioca FPSO unit, with a production capacity of 180,000 bopd. The second development phase, Sépia-2, will also comprise a new-built FPSO of 225,000 bopd capacity. TotalEnergies owns an interest of 16.9% in the Sépia field, in partnership with Petrobras (55.3%, operator), Petronas (12.7%), QatarEnergy (12.7%) and Petrogal (2.4%).

The two FPSOs are expected to start producing as from 2029. They have been designed to minimize greenhouse gas emissions through an all-electric configuration and technologies such as waste heat recovery, closed flare, cargo oil tank gas recovery and variable speed drive for compressors and pumps.

“The decision to launch Sépia-2 and Atapu-2 is a new milestone in our strong growth story in Brazil, a core area for the Company thanks to its world-class low-emission and low-cost oil resources” declared Nicolas Terraz, President Exploration & Production of TotalEnergies.Following the startup of Mero-2 in late 2023 and the upcoming startups of Mero-3 in 2024 and Mero-4 in 2025, Brazil will soon account for more than 200,000 barrels of oil equivalent per day (boepd) in equity production for the Company. At their plateau Sépia-2 and Atapu-2, the tenth and eleventh FPSO for TotalEnergies in Brazil, will contribute to maintain TotalEnergies production in this key country above 200,000 boepd.”

***

About TotalEnergies in Brazil
TotalEnergies has been operating in Brazil for almost 50 years, through six subsidiaries, and today employs more than 3,500 people in its business segments, in Exploration & Production, gas, renewable electricity (solar and wind), lubricants, chemicals and distribution.

TotalEnergies' Exploration & Production portfolio currently includes 11 licenses, of which 4 are operated. In 2023, the Company's average production in the country was 135,000 barrels of oil equivalent per day.

TotalEnergies is investing in the growth of the renewable energy segment in Brazil. In October 2022, the company entered into a partnership with Casa dos Ventos, Brazil's leading renewable energy player, to jointly develop a 12 GW renewable energy portfolio.

TotalEnergies is also active in the Brazilian fuel distribution market with a network of about 240 filling stations as well as several storage facilities for petroleum products and ethanol.

About TotalEnergies
TotalEnergies is a global integrated energy company that produces and markets energies: oil and biofuels, natural gas and green gases, renewables and electricity. Our more than 100,000 employees are committed to provide as many people as possible with energy that is more reliable, more affordable and more sustainable. Active in about 120 countries, TotalEnergies places sustainability at the heart of its strategy, its projects and its operations.

@TotalEnergies - TotalEnergies - TotalEnergies - TotalEnergies

Cautionary Note
The terms “TotalEnergies”, “TotalEnergies company” or “Company” in this document are used to designate TotalEnergies SE and the consolidated entities that are directly or indirectly controlled by TotalEnergies SE. Likewise, the words “we”, “us” and “our” may also be used to refer to these entities or to their employees. The entities in which TotalEnergies SE directly or indirectly owns a shareholding are separate legal entities. This document may contain forward-looking information and statements that are based on a number of economic data and assumptions made in a given economic, competitive and regulatory environment. They may prove to be inaccurate in the future and are subject to a number of risk factors. Neither TotalEnergies SE nor any of its subsidiaries assumes any obligation to update publicly any forward-looking information or statement, objectives or trends contained in this document whether as a result of new information, future events or otherwise. Information concerning risk factors, that may affect TotalEnergies’ financial results or activities is provided in the most recent Universal Registration Document, the French-language version of which is filed by TotalEnergies SE with the French securities regulator Autorité des Marchés Financiers (AMF), and in the Form 20-F filed with the United States Securities and Exchange Commission (SEC).

TotalEnergies

Media Relations: +33 (0)1 47 44 46 99 l presse@totalenergies.com l @TotalEnergiesPR

Investor Relations: +33 (0)1 47 44 46 46 l ir@totalenergies.com

Source: TOTALENERGIES SE

FAQ

What is the Final Investment Decision (FID) for Atapu-2 and Sépia-2?

The FID for Atapu-2 and Sépia-2 refers to TotalEnergies' commitment to proceed with the second development phase of these oil fields in Brazil.

When will the Atapu-2 and Sépia-2 FPSOs start production?

The Atapu-2 and Sépia-2 FPSOs are expected to start production by 2029.

What is the production capacity of the new FPSOs for Atapu-2 and Sépia-2?

Each new FPSO for Atapu-2 and Sépia-2 will have a production capacity of 225,000 barrels of oil per day (bopd).

How much stake does TotalEnergies hold in the Atapu and Sépia fields?

TotalEnergies holds a 15% interest in the Atapu field and a 16.9% interest in the Sépia field.

What technologies will the new FPSOs use to minimize greenhouse gas emissions?

The new FPSOs will use an all-electric configuration, waste heat recovery, closed flare, cargo oil tank gas recovery, and variable speed drive for compressors and pumps.

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TotalEnergies SE is a French multinational integrated energy and petroleum company founded in 1924 and is one of the seven supermajor oil companies.