A newcomer to the oil sector, Brazil's Elysian Petroleum acquired 122 blocks of the more than 600 areas on offer in oil regulator ANP's latest auction on 13 December. The company — which was founded in August specifically to participate in the bidding — expects to begin production at 2,000 b/d, increasing it to 3,000 b/d by 2028 and reaching 5,000 b/d in the future, it said. Founder and chief executive Ernani Machado — who also is the head of a technology company — spoke to Argus about Elysian's strategy during the auction as well as its next steps. Edited highlights follow.
Elysian won more than 60pc of the areas auctioned by ANP in December. What was the strategy behind the acquisitions?
The strategy was opportunity. I could have taken a few areas and waited for the next auction, praying that no other company would take the areas I wanted. So I just prayed to get the areas for the maximum value I could afford.
God helped me because I got 122 of the 126 areas I wanted.
Why did Elysian focus on onshore areas, without purchasing pre-salt areas?
Extraction [in onshore areas] is much cheaper, there is less environmental impact and the risk compared to pre-salt is negligible.
Therefore, I prefer not to operate on the high seas, but rather with my feet on land.
Elysian also focused mainly on the Potiguar basin, winning 99 of the 107 blocks auctioned there. Why?
The strategy was to concentrate investments so infrastructure can be better utilized.
Is there a forecast for the start of operations in the blocks?
We will be signing contracts on 31 May and begin research and surveys on 1 June to start extraction as quickly as possible.
How can a new company stand out in the oil sector?
Our strategy is based on increasing technological innovation for extraction and rationalizing our expenses in an assertive manner.
We will work quickly and surgically to start extracting oil in the shortest possible time and thus effectively solidify ourselves as a new player in the market.
In short, we want to do more than promise and deliver actual results.
What are Elysian's next plans? Will it get involved in other blocks in the future?
We are currently working with the present. We will focus on the operation of our 122 fields. We will think about the 123th field and so on in the future.
You are a technology executive. Why did you decide to migrate to oil?
I saw an opportunity to go to a sector with great demand and high rates of financial return.
How will your experience with technology help you stand out in the oil market?
It will help because we can create new technologies that increase viability and reduce the environmental impact of oil and gas extraction.
