QGEP Participações S.A. today announced that it has signed an amendment to its contract with Teekay Offshore Partners for the charter of the Petrojarl I floating, production, storage and offloading unit (“FPSO”) for the development of the Atlanta Field.

The amendment takes into account the technical issues surrounding retrofitting the FPSO and the resulting delays in delivering the unit to the Atlanta Field. Under the terms of the amendment, QGEP will pay a lower day rate for the FPSO during the first 18 months of production, which should reduce overall operating expenses at the Field to US$410k per day, approximately 15% below the original cost. After the first 18 months of production, the original day rate will become effective, plus a variable rate which will be largely based on oil prices during the remainder of the contract.

Commenting on this progress, Mr. Lincoln Guardado, QGEP’s CEO noted, “we are very pleased that we were able to come to a mutually beneficial agreement that will ensure commencement of oil production at the Atlanta Field during the first quarter of 2018. The reduction in daily rates for the first 18 months of production will reduce our operating expenses at the Field by approximately US$4 per barrel. Additionally, provisions of this agreement will enable us to optimize our results from the Atlanta Field in periods of lower oil prices.”

Located in Block BS-4, Atlanta is a post-salt oil field 185 km off the city of Rio de Janeiro in the Santos Basin in water depth of approximately 1,500 meters. Queiroz Galvão Exploração e Produção S.A. is the operator of the Block with a 30% ownership; other Consortium members include OGX Petróleo e Gás S.A. (40%) and Barra Energia do Brasil Petróleo e Gás Ltda. (30%).

The amendment is subject to certain post signing procedures.