Petrobras PBR, which is owned by the Brazilian government, along with the Norwegian state-owned multinational energy company Equinor EQNR, recently declared that the two jointly commenced production from the first two wells of the increased oil recovery (IOR) project at the Roncador field, offshore Brazil.

The two wells where production has begun are the first of a series of IOR wells to reach that stage. The output start-up is around five months ahead of the calendar and at half of the originally estimated cost. Moreover, the two wells add a pooled 20,000 barrels of oil equivalent per day (boe/d) to Roncador through the FPSO P62, augmenting the total throughput to about 150,000 boe/d, thereby decreasing the carbon intensity of the field.

Under this initial IOR project, the associates will drill 18 wells, which will result in extra recoverable resources of around 160 million barrels. Well design enhancements and partners’ technological know-how are the core driving force behind the 50% reduction in the cost for the first six wells, including the two already in production.

The Roncador field, which has been in production since 1999, is operated by Petrobras and is Brazil’s fifth-largest producing asset and the second largest outside the pre-salt layer. PBR holds a 75% interest in the field, while the remaining 25% stake is owned by Equinor, which entered the project as a strategic partner in 2018.

Headquartered in Rio de Janeiro, Petroleo Brasileiro S.A. or Petrobras S.A. is the largest integrated energy firm in Brazil and one of the largest in Latin America. PBR’s activities include the exploration, exploitation, and production of oil from reservoir wells, shale and other rocks as well as the refining, processing, trading and transportation of oil and oil products, natural gas and other fluid hydrocarbons, among other energy-related activities.

Headquartered in Stavanger, Norway, Equinor is one of the premier integrated energy companies in the world, with operations spreading across 30 countries. In Europe, EQNR is the second-largest supplier of natural gas. It is also a leading seller of crude oil. Over the years, the company developed its expertise to expand upstream operations outside conventional offshore resources to the prolific shale oil and gas plays.

Petrobras currently carries a Zacks Rank #3 (Hold). Some better-ranked stocks from the energy space that warrant a look include Earthstone Energy ESTE and Oasis Petroleum OAS, each sporting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.