Good morning, ladies and gentlemen. Welcome to our conference of the third quarter of PetroReconcavo. I'm Marcelo Cruvinel, in relationships with investors, and we have our CEO today, Marcelo Magalhães, the COO Troy, and CFO Rafael Cunha, and also Virginia Ribeiro, our RI Specialist. This is being recorded. It is going to be available in the site of relationships with investors from the company, and this tool is available. There is interpretation on the bottom right of the screen, and you can silence the original audio if you want to hear in English. We're going to have a Q and A session after the presentations. Please send the questions written out, and then we will invite you to ask the questions live.
If you choose not to participate live, just write at the end of the question, "No audio." Before we start, I'd like to say that any declarations made during this video conference, according to the business perspectives, projections, and financial targets of the company, they're based on the beliefs of PetroReconcavo and according to the administration of the company. This is not a guarantee of performance. They involve risks. Investors have to understand that there are operational conditions, economic conditions that can affect the results of the company and that can change the results in terms of future perspectives. Now on to Mr. Marcelo Magalhães, the Director of the company, to start with his initial comments. Marcelo, please.
Thank you, Cruvinel. Good morning, everyone. Once again, it is great to be here sharing with you the quarter results of the company.
If I could use one word, I would use the word consistency. I think one of our great objectives here has been consistency in the delivery of the outcomes of the company. I believe that the quarterly period is the best way of measuring consistency. We're very satisfied with the numbers. I think most of you have already seen them in a very intense manner, and it's always nice to repeat good things, but I think we can move over to some general comments here. Before that, I would like to thank the whole team of PetroReconcavo. We've been through a great growth process, above 1,100 employees in the company, and the other day, we had a register of almost 70% of them less than three years working here.
It is very gratifying for all of us to see this kind of organization that has proven to itself and to the market that it is able, and it has the capacity to scale up its activities with safety, with creativity, and above all, with the generation of value for our shareholders. All of this is reflected in the results, and we are presenting this to you, and our collaborators definitely are the main source of the results. I would like to call your attention to not only the numbers, but some relevant aspects during this period. I think I'm going to start with refinancing of the company debt. I think the conditions of the financing, it was renegotiated, and it shows the trust of the market with the management of the company, and we had very competitive situations compared to most of our peers.
Throughout this period, we also had intense activity of perforation of wells. I would like to highlight that we had the first perforation that was exploratory for the company. The results are still preliminary, but the expectations are huge of a future impact in terms of reserves. At this point, we detected something in the perforations, and we are in the process of making the procedures for the long term so we can have a better assessment of the reserves in a block that is according to what we call Polo do Sabiá, this region. This represents the growth trends of the company in terms of perforated wells. This is Sabiá-da-Mata, Sabiá do Crioulo , where we operate, and there is a partnership with Sonangol.
We have also had, during this period, extension of concessions and also with the reduction of royalties, conditions that we believe are extremely favorable. In terms of natural gas, this is very important. I think natural gas has a huge effect on the numbers if we are talking about revenues and profit, and also as you will see in the reduction of the cost per barrel. These are results that we are very satisfied with, but this comes from very well done work, very thorough work made by the company, not only in terms of developing commercialization. We have three new contracts. Some of them came after. For the first time, there are milestones that have been indicated here, and the company has been going for it, and we are very happy to be able to have reached this. A huge expectation of increase in the production of gas.
This has been done and is being done. There is an improvement in the commercialization with several new customers, competitive prices. It is important to highlight that we are also dealing with the back office very carefully, and we were very happy to be able to submit this to our Board. This is about gas. This is a very interesting project that is going to increase the processing capacity here in Bahia. It is going to reduce the cost of transport significantly as they will be able to bring gas, and we are not going to have to go through the transport infrastructure. Also because it is a unit that is extremely compact and modern, and there is a low cost, and it is going to allow us to increase the processing capacity of the bay.
This could be a bottleneck at some point, so we are anticipating this and preparing the way so that we will be able to implement procedures, and then we will be able to make this gas get to the market with very competitive prices. This is a very important part of the company operations here in the northeast of Brazil. We also have a lot of advances to report in terms of compliance. We also have our integrity program that is evolving. Also conduct and ethics. We got the seal of a clean company. Finally, I will talk about the important victory that the company achieved with regard to the suspension of any impediment to negotiation. We are going to talk about this later on, but we were very satisfied, and we have seen this in polls.
So definitely it was very clear in Rio de Janeiro. We also have the negotiation process with Petrobras, and this is going to be starting this week. There are great expectations with regard to that. After these initial comments, I am going to give the floor to Troy, who is going to talk a little bit more about the production aspects.
Thank you, Marcelo. Good morning. Just for you to know, we know that we have some new investors here in this call. PetroReconcavo is divided into two main series. We have Potiguar and Bahia. In the Potiguar asset, which is near Mossoró, we are already looking at 32 concessions that are operating. We have an exploratory block that Marcelo talked about the results up to now. There is one concession that is shared with a partner.
In the Bahia asset, we have 12 concessions and five other concessions that are operated, and it has been operating it for 22 years. This is called Remanso do Sobral. We have 17 different concessions there. Recently we have the acquisition of the Miranga Pole, and it has nine operating concessions. You can see that on average, in terms of production in the last quarter, we increased our production 7% to 22,000 bbl. If we look at the last year and compare, you can see the different colors in terms of production that we have in each pole. In Potiguar, Remanso in yellow, and then in red we have Miranga. You probably noticed to the right, we are making a comparison of the average production of the company during the first nine months. So it is 20,685 bbl for our working interest.
This is based on the prognosis of 2 P and our reserves. This is not normal for this success in a company. This change, the reason for this is the success that we had during the last nine months, moving the production in Miranga, and also with great results that we see in Potiguar. Up to now, we have been investing about BRL 440 million to develop this increase in production and the reserves, and this is in line with our reserves report that we have. If we look a little closer to the Potiguar asset, we have an incremental production of 6%, so 11,400 bbl, and again, we are talking about working interest, and going on to 12,000 bbl working interest. We have a huge level of activity in Potiguar.
We already have workover, and recently we added in this last month, a sixth probe to be able to work there on services. We have continuous perforation operations. During the third quarter, 42 workovers, and 11 wells were perforated. There is also an increase in production that reflects the optimization of the compression system in this fall. We are finding more gas reserves than we expected initially, and then the optimization of the whole compression system, and the gas that outflows, and this is what we are having over the next few years, as well as this year. Looking at the wells that were perforated in the Potiguar asset, you can see this development of this program through the last quarters, and according to the number of wells that were perforated and the incremental production. This production is within our expectations in terms of reserve wells.
The speed of the perforation is not as high as we expected. We are running a little late with regard to the number of perforated wells, and we are going to have about 41 wells perforated at the end of the third quarter. We had some delays in terms of the perforation probes, some logistics issues, and there is a delay of three or four wells in this program. In the Bahia asset, we have an increase of almost 10% in production according to the last three quarters. Once again, we have the workover that we are working on, especially in the Miranga area, to be able to optimize gas. There are several projects for facilities to optimize the compression that we already have there. Miranga continues being the engine that is making this growth possible in Bahia, and it is going to continue in 2023.
A specific part about PetroReconcavo, and this allows me to sleep a little better at night, it is our internal area of units and equipment, and our fleet to execute our development programs. As you can see, since 2017, Marcelo had the beginning of the expansion in this area, and we began to add several pieces of equipment and workover probes and perforation probes, and also treatment equipment, and it has already been internalized now. This year we have had growth of five to six units up to now, focused more on the workover probes. In this process, when we are talking about an acquisition, we have two new probes, perforation probes, and they are light, they are very efficient, and this is what we are bringing over from Canada.
This could accelerate our development program in these shallow wells, especially in Pingo Sabiá , that has several concessions with several opportunities for perforation. The second perforation probe that we are bringing over from the United States is a heavy one. It can perforate up to 5,000 m, and it has 1,500 HP, and it is a probe that can perforate very easily up to 4,000 m, 5,000 m and develop several areas that we have identified. So condensed gas, and these are very deep areas in the Riacho da Forquilha , and in the Potiguar Pole, and also in the Miranga field. We are going to start in December. We have a light probe that is outsourced with a Brazilian local company to be able to accelerate and perforate shallow wells that we already have to develop there in Potiguar. We have five workover probes that are coming in different phases.
They are coming from the United States. to our fleet here in Brazil. We are anticipating that next year, in 2023, in the middle of the year, we are going to get to a fleet of about 17 or 18 workover probes and services to be able to carry out our development programs. Another part of this, and we are in the acquisition phase of a complete unit, a fracturing unit, and this is going to divide our fracturing equipment into three sets, and this is going to make it easier for us to fracture larger quantities and bringing these three sets together and making small fracturing more frequently in our development program. I am now going to give the floor to Rafael so that he can talk about the commercialization area for gas.
Thank you, Troy. Good morning, everyone.
In terms of gas, just going over it, until last year, we sold all of our gas production to Petrobras. Petrobras then commercialized this. We started to hire the processing operation of Petrobras, and we started commercializing directly. In Bahia, we still work through temporary swaps through the Catu unit. It is going to finish at the end of this year, and it is going to be a service provision. We also have services in the other areas. We developed a portfolio of customers, a very big one. Here on the right, we added three new contracts. It is worth mentioning that Marcelo said they bring a different taste to our portfolio. These are contracts that we can buy and sell gas to each other. It also applies access for us to bring customers in the southeast of the country.
It also allows, on the other side, accessing customers from our portfolio. It is a lot of accessibility in the commercialization area. The contract with TAG, providing gas to the system, is another contract that it is not like a state distributor. It is a new kind of customer. We have been able to, in this market, it is a spot market, it is a more recent one. We have had very favorable price decreases according to the original contracts that we opened up. Finally, the contract that we announced this week with Unigel, that also marks the first contract that we have with a free consumer. In this modality, we are going to supply this to the plant that they have here in Bahia. Now, talking a little bit about costs. Marcelo has already talked about it. We have had a reduction of the cost per barrel in this quarter.
We always like to look at the accumulated amount every quarter. In the previous quarter, the dollar had gone down, so this also goes against it. It recovered a little bit this quarter. The main thing to emphasize is that as production has increased, we have been able to carry out some gains in scale, not in the same proportion, but together with the fluctuations of the dollar and et cetera, we have had an increase in the proportional participation of natural gas in our production. We always say that the production of gas has a marginal cost that is smaller comparing to petroleum. This has contributed for us to have a good performance of a cost per barrel, even in spite of the inflation. Over here, zooming in on the costs, the main item, we had an increase of 14% in the licensing.
That is the expansion of the workforce, especially associated to the expansion in the quantity of probes and the service units that are working. We also have a seasonal adjustment. The beginning was 1st September. We recognize that there is a recalculation of the 13th salary and all that, so there is a bigger impact in the cost when we do this sort of thing with the average accumulated inflation of 8.5%, more or less. The other items, they have behaved quite well. In the company, the main kind of growth has been in the transport of natural gas and the outflow of natural gas. This has to do with the volume that we have had in terms of natural gas. We also move forward as we have to hire capacity.
With Petrobras, we always try to have an excess to be able to guarantee that we're going to have capacity for outflow and transport available so that we can distribute our gas or transport our gas. We put this into our contract, and we had a provision of losses of BRL 2 million because there has been some discussion about the swap contract. At the end of the day, we sold gas to Petrobras in the beginning of the Catu plant, but there is an account there that Petrobras retains an amount. We have a cost associated to processing and the part of transport of the gas. Petrobras has started the discussion about this. Since July, we have been very conservative providing an amount in this contract. Now, zooming in on revenues. There are two things to highlight.
The first one is that since we have announced it, there's expectation of growth of natural gas as a proportion of our revenues. Until last year, it's about 5% of our revenues, and this year, this quarter, we've achieved 34% in the net revenues, and we have an increase in volume with an increase in, or improvement in monetization. We also put this table, several analysts asked us to do that, so that we can look at the average price. This is for oil divided by the volume produced, and over here, we're looking at oil and how we have hedge operations without considering the hedge, and excluding hedge. For oil, it was $71.97 per barrel, and already considering the hedge, and $92.30 per barrel Disconsidering hedge.
I would only say this is an opportunity that in a Potiguar asset, in terms of oil, there's a bigger discount compared to the Bahia asset, and this contract is different from the original contract from Petrobras. The Petrobras contract ends in the middle of 2023. There's a huge opportunity for renovation for us to be able to reduce this discount of the oil that has a great quality. In terms of gas, also talking about the results here, we've been able to increase the price every quarter as we make new contracts with better conditions. We've reached $12.8 per million BTU, and over here we're including the passing on of the transport cost, but excluding the passing on of the transport cost as if it were the price of the molecule that stays with PetroReconcavo, it's $8.5 per million BTU.
We've talked a lot about DRE, so the net revenues, we had an increase of 16% of the net revenues in a quarter where oil has gone down quite a bit, and it shows the growth in production and in the revenues for gas especially. Royalties reduced a little bit. It was a quarter where we already acted better in terms of reduction of royalties that we had with MT because we became medium sized companies. This was materialized in the second half of the year, and this resulted in an EBITDA that increased 11% in the third quarter, and it was BRL 1.2 billion and net revenues of BRL 744 million. Our hedge book, of course, it still impacts us negatively. There was an impact of BRL 127 million in the quarter, below the previous quarter.
The volume of hedge, remaining hedge, is at 3.3 million barrels. That is going to be materialized over the next two and a half years. We still have a few contracts, but in a decreasing volume. Just have to say that we had already gotten a waiver from the banks in the first semester, so we did not do any additional contracts. Then with the refinancing of the debt, we do not have the obligation of making hedge contracts on a quarterly basis. So it gives us more flexibility to deal with this hedging strategy for oil. Showing you a little bit about the uptake of our follow-on from a few months ago. We have $350 million in cash, and our banking debt with the refinancing, it is $126 million. So it is in yellow, and we have already amortized it quite well.
This reinforces the generation of a free cash for the company over the next few years. Also highlighting, as Marcelo said in the opening, besides the reduction of costs that were quite significant with regard to our previous debt and with regard to what we have seen in some other players in the market in our sector, we also brought a series of simplifications and covenants. So, for example, we gave warranties of the oil concessions, and with this being free, we used it to warranty the commissioning and abandonment with ANP, reducing the need to hire credit and other more expensive issues. Then we had also flexibilization of not having the additional oil hedge commitments. This contributes a lot towards enhancing the liquidity of the company and giving it more flexibility. Then passing it on to Marcelo again.
Thank you, Troy. Thank you, Rafael.
I am going to talk a little bit about ESG, which is an area where the company has evolved quite a bit. I would say that in all three areas, it is an area that we are very strong in according to the strategic plan for the company. It is discussed with our Board quite a bit, and I think we are going into a moment where the several programs on ethics and conduct and integrity, as well as the social and environmental areas, they are becoming clearer in the company's strategy. This is going to become reflected in our actions next year, and also in our sustainability report that is probably going to be released in the first quarter of 2023. I have already mentioned some of the issues. I am going to highlight the enhancement of our social programs.
So in the Sabiá, with the consulting of family agriculture for the communities that live around the area, especially in the Miranga Pole. We also have a partnership with Tamar project and Mata de São João, which is the headquarters of the company, the formal headquarters. We have a partnership with ICMBio, and we planted 18,400 native plants. This is an area that the company has focused on quite a bit. We have plans to increase our activities, especially in terms of the use of the soil, the water, environmental education of the population in the area. It is a very poor population in terms of these issues. I personally, I am very proud of this last thing. We concluded the first training groups of pro professionals who are doing this activity in partnership with SENAI, and it has to do with the capacity that Troy was talking about.
It's an area where we have a gap in the investment over the last few years, so we have the need to train new people. We also have strong participation of females. This is something new for the industry, so we also have a lot of professionals that are able to finish these training courses, and we're able to bring them into our workforce. So we also have schools, and there are other companies doing similar activities. So once again, this is a very strong contribution of the company, of the operators for the training of people, as well as for the social issues of these companies in this area.
I always like to say that the impact of operating in very poor areas, and all of this investment that we've had in the generation of revenues and jobs, and this is reflected in the municipalities, and there's a strong impact in terms of taxes in our operations, and this has been interesting. So we're very proud of the impact that we've had in Bahia do Norte and also in the Northeast and Espírito Santo. As our final remarks, as was said before, we consider that we are changing phases, and I think we were very focused on being able to scale the company up, and the volume of activities and equipment, and it was very focused throughout the year, especially with regard to Miranga.
I think that now we're ready to go into a more strategic moment of trying to find more efficiency, opportunities in terms of security, and we also have a leadership process in the transformation of offshore here, with very safe and productive activities. And that's absolutely necessary for us to be able to deliver this investment program that the company has. And this is being reflected in our reserves and also in terms of revenues and EBITDA and profitability. This is what you saw in our statements. And we're going to enhance perforation as well with the two new probes that will be available in 2023. And this will give us greater capacity for perforation and greater flexibility for perforation with different intervals. The intervals will be smaller, we will go deeper. So we have great expectations, as Troy said. It's above what we expected in our initial evaluations.
All of this is reflected again in what we already see in the processing and commercialization of gas, and we've been talking about Bahia Terra, and I think the company definitely has great preponderance in all of the development of the gas market in our country, and we have been pioneers in the use of shares and in the sharing, according to what we saw at the end of last year in Catu, and now the first contract with independent consumers and producers. So we're going to be able to not only have better commercial conditions, we're going to be able to have greater reach. And this is extremely positive for the company to have an increase in participation in our portfolio for several reasons.
There will be diversity of the customer portfolio and in the world in terms of the transition that goes beyond the future. This is also something that we noticed over the last few decades. It was not very well explored by the operators. This gives us an opportunity to advance quite significantly in what we expect with regard to gas. I understand that also the report of reserves is going to change. We have focused a lot on the structuring of an M&A group internally. We have evaluated opportunities. We have mapped more intensely all of the basins in the offshore here in Brazil, trying to find exploratory assets in the bases, and also with partnerships or the acquisitions. Again, emphasizing the negotiation of the Bahia Terra pole.
We are already engaged with Petrobras, and we believe that this process is going to follow through quite naturally, according to our expectations. Maybe in the third or fourth quarter of 2023, we will be able to close this transaction.
Thank you, Marcelo. Let us now go on to the Q and A section. Remember that if you want to participate, please send your questions written out. We can open up the microphone for a live interaction if you wish to do so. Let us start with the first question by Bruno Amorim from Goldman Sachs. Go ahead, Bruno.
Good morning. Can you hear me?
Yes, Bruno, go ahead.
Okay. Thank you. I have two questions. One is about Bahia Terra. I would like you to talk about the long-term issues that you have for the oil price.
I would also like to know if there is any reason for the asset to be worth more or less than at that time. Is this a difference because of the oil, or because of production, or there is a difference in the value that you attribute to the other contracts and assets that come together with the upstream? That is the first question, to understand the scenario and if something has changed. The second thing is with regard to gas. I do not know if you can talk about this. I know you have already mentioned quite a bit about it, but if you could give us an idea of what can happen that is incremental from now on.
Would you say that most of what has been converted in terms of old contracts into new contracts with better prices, is there still a lot to be done in that area according to the volume that you are producing now? That is the second question. Thank you.
Talking about Bahia Terra, I am going to start with that. In terms of Bahia Terra, I do not have exact numbers. These are strategic information. But normally we do valuations. We use the futures curve with a horizon of two or three years in the part of the offer, and then we use the long term, and usually this is smaller values, so about $60 or something like that. I think what happened from then on, it did not really change a lot. The stock price, maybe it has oscillated a little bit down, but not too much.
Since we have this long-term, more conservative assumption, the impact is not that relevant. I would say that in general, we do not really have many reasons to attribute a great variation up or down. Things have improved, like the price of gas, the perspective of monetization of gas as well. On the other hand, the cost of the debts, the trend is for it to go up. It went up more recently, but there are changes in the value perspectives of the asset. We continue thinking that it is a good business within the offer, and there is no real need for variation. With regard to gas, I would say that we are still looking at other contracts, and we are going to have new contracts in the next quarter.
I think it depends on incremental production generation, and every molecule of incremental production it is going to be channeled towards these contracts that have more attractive prices. We are probably going to release this at the end of next year, after the Potiguar and gas, and we are going to see some of the contracts that have the hired areas so that we can transform this into contracts that are closer to the spot prices. It is very dependent to the increase in production, as I said, and Troy did as well. We have very interesting expectations for the increments in the production of gas, and it is within our expectations, and we are going to have a report about the reserves in November, December. With every additional molecule, we add on more interesting contracts.
Even if you do not have new contracts, you are going to see what Rafael showed, which is an increase in the average price of the company according to the molecule, according to the quarter.
Thank you. That is very clear. In terms of the incremental volume, I think it is easier for us to make our calculations, but do you have a quantity of your volume? Is there still the part that has not migrated yet? Do you have a number?
I do not know this. From Potigás and PBGÁS, next year it is going to be 100,000 cu m. Starting in 2024, we are going to have 336,000 cu m about these two contracts. It is CEGÁS that has 30,000 + these new contracts at the end of next year. The volume is going to be a little bigger.
Okay. Thank you.
Thank you, Bruno.
Let us go on to the second question. It is André Carvalho. André Vidal. People know him as Vidal. Please.
Thank you. Good morning. Good morning Marcelo, Troy, Rafael, Marcelo. I would like to talk a little bit about Bahia Terra. I would like to understand the issue of the timing that you see for the end of this acquisition. We have the change in government, and they are going to change their position. They had some declarations about this investment in Petrobras. I would like you to understand what you think happens if this acquisition is not finalized in the short term. If we can have near Petrobras a reevaluation, and Petrobras, we know that once a year, Petrobras updates the assumptions of their balance, of their assets, and this is going to be reinitiated on their side, probably. The second question is about the problem of the swap contract with Petrobras.
I'd like to know if there's still some possibility of a new group of receivables in the next quarter and the following ones, or if you've done all of this in this quarter.
I'm going to start with Bahia Terra, and then Rafael can talk about the swaps. As I said, we started the conversations with Petrobras this week. I believe that this is going to be quite fast, a fast process, and we could have done it before, this kind of negotiation with Petrobras. We know that this is something that is not solved in a few weeks. Personally, I see that the disinvestment process, it is something that is consolidated, and this is something that was started in the Dilma Rousseff government, with Graça Foster, and then it went through three different presidents, several parties, and it seems to be well dealt with.
Not only in terms of results, but all the other operators, they have presented an investment level. I think this discussion is going to be reopened regarding some other aspects of Petrobras. I think it doesn't make sense for it to change that much. We treat it as a normal process. Honestly, the chances of this being signed this year, it's very small. I think in the previous processes, there were months of negotiations involved, and even if we consider that the change in management is going to bring some kind of delay in terms of the internal procedures of Petrobras, we still have the expectation of closing this contract over the next few months. We believe that the process with the MP has been faster. We maintain our expectations for the third and fourth quarters of next year.
We believe we can make it something concrete, and we're going to have, maybe on the 1st of July, and Petrobras has tried to make a match. The conversations we've had with other operators follow the same line, and none of us believe that this is going to be changed very much.
Okay, about the swap contract. Originally, it was supposed to be on until June, and then it was extended by Petrobras till the end of December. It was supposed to be temporary, and it lasts a little longer compared to what we expected. Basically, as I said, the main source of divergence is that we signed this contract in December, and it was in effect in the first half of the year without any discussions.
Then in July, Petrobras told us that there was an understanding that the amounts of the net amounts were higher than what they thought was reasonable and et cetera. They began to suggest the change in the method used, and over time, we've been discussing with them, and we've been very conservative in terms of providing something in a midway between the original contract and what Petrobras is proposing now. Since the expectation for this contract is for it to go up to December, we're trying to build a solution, a friendly solution for Petrobras, and we hope that it's going to work well, and we hope we're going to be able to solve this in this quarter. Probably in the next quarter, we're going to have a similar situation to this third quarter.
We're going to recognize the revenues, and we're going to have a loss provision, considering that part of this value is going to be in a dispute. This swap contract is going to finish in December, and the good news is that it's going to come to a point of resolution until the end of the year, and then we're going to have a new year with a new situation.
Thank you very much.
Thank you, André . Next question is from Tasso Vasconcellos from UBS.
Hi there. Good morning. Good morning, Marcelo, Troy, Rafael, all those who are present. Let me try and make some follow-ups here. First about the processing account of natural gas that you've already announced. It's going to be in Bahia . If you could go back and give us a little more detail in terms of total investment.
You talked about a cost reduction, so if you could quantify what you expect in terms of a cost reduction with the gains in the TAG tariff, if you can actually put this into contracts to quantify this processing account a little bit. Also understand that if this is a complementary project to Bahia Terra, maybe we have to understand if it's complementary or if it is competitive with Catu. Just to understand the scenario where you have this unit as well as the GN from Catu. A second question, you made it very clear in your presentations that you have a very healthy cash position. Trying to understand if Bahia Terra does not move forward, what are the opportunities for the allocation of capital? Do you have another M&A, as Marcelo said, according to your internal team?
Do you have another short-term M&A possibility, or what are the possibilities of the return on investment for the shareholders when you talk about this comfortable cash position? The third question, when you talk about Petrobras, as Rafael said this contract ends at the end of this year, regardless of any scenario in Bahia Terra, because I understand that if you continue with Bahia Terra, you become the operators, so there's no need for this contract, right? Just for me to understand how this is going to work, and if you can also say something about what has been more difficult in the negotiation of this contract for us to be able to understand the delay in the initial provision of June, July. These are my questions. Thank you.
We're going to have to circulate through all of us to be able to answer the scope of your questions. Let's see if we can remember. I would say that the swap contract probably is going to be replaced by another contract the way that we have in Guaimbê. Swap is something, it's not going to be extinct, and it's going to be replaced by a contract of Catu. While it's in the process of investment from Bahia Terra. This installation is going to be the company's, and of course, we're going to extinguish this contract. The processing unit of gas that we're talking about, basically we're talking about Jacuípe, and these are fields that are closer to Mata de São João, where we had those initial operations of the Remanso pole .
The logic is it is complementary with regard to Catu, and there is a very strong aspect according to the characteristics of the gas. You can have a simpler installation and the cost is much lower in terms of processing, and there is a great advantage of not having to circulate the gas through the transport structure. Effectively, this makes it a lower cost. It increases our margin regardless of the fact that it is priced in the contracts. We still have to wait to be able to have this unit ready and to be able to have the production of Jacuípe, and with anything that is not committed to the current contracts. I would say that these are the parts regarding the complementarity of the swap and the installation of gas processing that we are going to have in Jacuípe.
I am going to ask Troy to talk a little bit more about the technical details of what this unit includes, and then Rafael can actually say a little more about the impacts in terms of cost and also answer the swap issues.
Thank you, Marcelo. The situation that we already have, in our São Roque station, where we have several fields that are coming to the compression system, the result of the mixture of this gas produces a drier gas, and it is a gas that is in the other parts of the basin. This dry gas does not have to be treated that much to be able to address the norms of delivery in the Bahiagás system. In this aspect, the unit for the treatment is simpler.
You are removing some components, some molecules, heavier molecules, propane and butane, and you are also addressing the dehydration of this gas. You are addressing the norms that you have to address so that you can deliver it directly in the Bahia line for gas to be able to address the gas plant they have for the fields that they have besides this. This plant, there is the installation of two main things. We have the hydrocarbons, the heavier hydrocarbons, and dehydrate this gas to be able to provide dry gas to Bahia. Then the gas duct from Bahiagás, it comes close to São Roque. It is 1 km from São Roque.
Placing an infrastructure to measure this gas and to do the treatment of this gas, the water and the condensated one, and sending this over, we are not going to have to make up a transport line, not even with Petrobras in Catu. With this plant, you are going to take the demand away from the Catu plant in Bahia Terra. It is going to reach Bahia Terra. It is about 300,000 cu m- 400,000 cu m or more a day. This is what we can treat regardless of the Catu plant. The Catu plant, in our opinion, is coming close to its limitations. Over the next few years, with the growth in gas and the growth of other aspects that exist in this basin. Remember that the plant in the past, Petrobras had two gas plants, Candeias, that is inside the 3R, and the Catu plant.
The Candeias plant was interrupted three or four years ago, and it is not working these days. Most of the gas from this basin is going through to this plant in Catu. We are doing the planning over the next three or four years. We are trying to release this gas that is produced in São Roque, Jacuípe, Mata do Remanso, and also Riacho de São Pedro, to be able to release this, to be able to deliver directly to Bahiagás. Just adding something here, the Catu unit is operated by Petrobras. We are the biggest clients at this point, and other operators in the basin, they also have their participation quotas. We are close to a moment where we can have Catu as a limiting factor for our production.
The dehydration unit is going to increase our processing capacity as a whole, 400,000 cu m , and we are getting rid of eventual bottlenecks in the Catu plant. We are still working with the hypothesis that we are going to enhance the Catu plant and the conclusion of the Bahia Terra process, and this is going to address future needs for the production of the basin as a whole.
Okay. Just to give you some numbers, Troy, please correct me if I am wrong, but the investment in the plant is about BRL 25 million. Is that right? Considering the plant plus civil construction, all of the costs of the project. All of the costs. It is not only the plant, it is the measurement, the fiscal measurement, several new lines of measurement, and several changes in the process. The total is going to be BRL 25 million.
The conclusion is about nine months to one year to conclude this project. Our cost estimation, it is a very simple plant, so the operational cost is low. Considering the amortization of the investment, it is less than $0.50 per BTU. That is about $2 the BTU. It is a little bit more than that Petrobras charges. There is going to be an increase in capacity for processing of the gas in the basin and coming from TAG because Bahiagás already has amortized gas ducts according to PGN of Poço Preto, which is about 1 km away in São Roque, as Troy said. They are going to open up the TAG, that is probably $1 or $2, the cost of transport.
Once again, it is going to reduce the final cost of the process for us and for Bahiagás, and this opens up a margin of just pricing on both sides. Both of them can improve the commercial margin and reduce it for Bahiagás at the same time. Okay? We also have to talk about the cash position. I think Marcelo said that we have analyzed some M&A opportunities. This is always going to be in our radar. We have our cash position ready to capture the opportunities that appear. I think we are also coming to the end of the year, and we are preparing to distribute dividends, and then let us see how this is going to work for us to decide on the amounts.
Thank you. That was very clear.
Thank you very much. Next question is from Leonardo Marcondes from Bank of America. Hi there.
Can you hear me?
Yes.
So thank you for choosing my questions. In terms of the accumulated amounts, I would like to understand the separation. Could you tell us the general panorama about the reorganization? Where the efficiency increase and the resources that you are talking about, where does this come from? The second question is a follow-up about the treatment unit. You mentioned that Catu could increase the gas production, although you are planning an increase in the capacity. When you acquire Bahia Terra, is there any kind of contract where you are going to have to divide with the other players, whatever Catu is producing? Or is it interesting for you to do this with the gas prices that we have today? Thank you.
Well, it is not a regulatory or contract issue. There is sharing of the infrastructure.
There are rules where you have clear preference from the operator who is the owner of the infrastructure. But it is a very good aspect, it is very commonly used in the industry, and of course, we are going to provide capacity. This is something that, this is a midstream play, and we enhance capacity to be able to address our increase in production. But there is the expectation of other players also increasing their production, and this is going to be another line of business for the company that we have already started in the midstream with a small plant that Troy mentioned. With the acquisition of Bahia Terra, it becomes much more significant. About the reorganization of the social clauses, we have several little boxes, right? We have Potiguar from Rio Grande do Norte, we have Miranga, we have PetroReconcavo that has Polo Remanso. There is tax distribution there.
The main point is about taxes. It is not the case now because the oil is up there, but there can be situations in a scenario where the account is bringing losses, it is bringing credit to the other areas. So there is a lot of tax inefficiency. Since we have the services, internal probes, the service provision, the internal service provision brings taxes, like ISS services for services, and it is for Reconcavo. So I am perforating in a certain place, I need to issue a services invoice. So I have to have a stock of materials for each company. This also generates the buying and selling of companies between companies. There are tax inefficiencies, and administratively, it is a little less financially speaking, but it is also relevant in terms of people's attention.
This whole process of consolidation and intercompanies and looking at taxes, it is all multiplied by three nowadays, and the idea is to simplify this and to have a similar model to Petrobras because all of the business from Petrobras is inside Petrobras. The idea in the future, for example, if the midstream becomes more relevant, maybe we can have another entity for midstream activities. The idea is to centralize it in a single entity because that is going to bring efficiency.
Great. Thank you very much. Thank you for the answers.
Thank you, Leonardo. The next question is Pedro Suárez from BTG.
Good morning, everyone. Good morning, Marcelo, Troy, Rafael, everyone from the team. I have a follow-up from the gas contracts question.
I'd like to know a little bit about how you see the balance between continuing increasing the amount of gas in these prefixed contracts, or leaving a little more for the capture of higher prices. In the short term, there seems to be a relevant portion of certifications in the reserves report, and maybe most of these volumes for next year. This is already closed, but maybe these assumptions seem to be very conservative, right, according to what you've said. The provisions and the gas curve. If you could talk about the ideal share of the production that can happen in these contracts and about the share that would be free, I think that would help a lot, and for us to have an idea of the potential for the gas curve in the short term.
A second question, it's a technical question I wanted an answer for. It's about crude oil, maybe for Troy. It's very clear that the production of gas is evolving quite well, opening up these increasing provisions. But the focus in gas, could this mean that the oil curve is a little behind in the beginning? Not that it's going to be reviewed down, but if it makes sense for it to be in line with what we already have and leg, that's probably the right word, according to what is happening in gas. Thank you.
The number that you want for gas, I don't think we have this number. We can't really say it. I think, as you said, we are moving towards the significant position of production. Again, you're right, because this comes from the care that was taken.
But we have expectations that we're going to have increases with gas, and this is going to define the type of contracts that we are going to make from then on. For 2013, what you said is true. We have a huge volume until the contracts of Potigás and Vibra Energia, until the end of 2022. A little bit more of what we expect at the end, so we have space for creativity from João and Laís to find new contracts. These new contracts are not a question of price only. Sometimes they also offer palliation and security, as in the case of the swaps, so that we can actually address all of the contracts without any kind of significant risk of incurring in fines or anything in the case of the company.
Well, we really have to start talking to the commercialization team and define a commercial strategy for gas, a formal one. There are many different opportunities. For example, people mention there's the opportunity of customers asking for a 10-year contract. What percentage of our production does it really make sense to put in a contract like that, such a long contract? The prices, and is it interesting to keep this for 10 years? What is the proportion? What percentage are we going to have in the contracts in Brazil? How much are we going to leave in dollars? How much is going to be hired? How much is going to be free for these spot markets? There are several moving pieces in this commercialization strategy, and I think we're beginning to see the details, and our idea is to make it more formal, and very soon.
We can't really say what time, but different parts, and this is going to be a combination of several different pieces that are going to make up the portfolio with a huge risk diversification. This can be translated into several benefits for the company in terms of perception of risk reduction for the market. About the second question, I'm going to clearly say that the average pricing of gas has made it very attractive for us to do gas contracts. Miranga is still a little in transition, and in terms of the baseline that we received, it's a little below the oil curve, but I don't think that this is going to diminish the trend here.
What we observe in Polo do Sabiá is that the new wells that have been perforated, also the fact that they're producing a little more gas than expected, this makes us not able to optimize it at this point. These wells still depend on the upgrading so that we can increase the volume of gas. As this happens, it's going to optimize the production of oil in these recently perforated wells. Some of these have been perforated, and they're not complete yet, so they're not generating commercial production yet. According to what Troy said, I think in the last few weeks or months, especially in the Potiguar Pole, we have observed the production of oil. I'm going to let him talk about this and receive the merit for that.
Okay. Pedro, of course, this is a concept.
When we make a prognosis of how we're going to do it, how we're going to report our reserves for more than one year ago, this free gas market and the new gas prices were not contemplated in these reserves. Of course, the priority of these projects is always based on the maximized world NPV, the present value of the projects with these investments. As Marcelo said, we're already below in terms of the oil curve, but we're very high in the gas curve. This reflects that after the reporting of the reserves, how the company works in the development area, and we're always evaluating every quarter the priority to optimize where we're placing capital. In the era of perforation, you need to have a bigger window in terms of planning, another nine months to one year.
But in the workover area, in the optimization and production, you can make these decisions in two or thre months, preparing material and also programming this work. You're going to see that the work is more directed to gas to optimize the gas side with these marginal prices that we see now, $10, $12, up to $15 per 1 billion BTU. Of course, there's more preference for gas to develop and also in the workovers. This is delaying the development for oil and the report of the reserves. We are developing gas faster compared to the past, and we're developing oil in a delayed manner, but the reserves are there, and we're only optimizing in terms of the present value of these projects for the company. I don't know if that answer helps.
Yes, it does. It does.
Thank you very much, Troy and the rest of the team.
Thank you. Next question is Bernardo Caldas from Banco Safra. Bernardo, are you there? Okay, Bernardo has left the webinar apparently, so you do not need to open his microphone. Thank you. We have a last question from Bruno, and he wants us to comment on the evolution of the lifting cost and the reduction in the quarter, and what kind of perspectives we can reveal according to the efficiencies that are being captured for over the next quarters.
Well, it is difficult to make projections, but in nine months of the year, I prefer to accumulate this. It is very similar to the average from 2021, so I think it has suffered. On the one hand, it is inflation, and everybody is involved here.
There was an annual inflation of about 10% a year, and the cost in dollars were even bigger in the oil industry. So there is a lot of materials and services increasing 10%- 15%, right? On the other hand, and this is all the trend to go up, for the costs, and on the other hand, we have protection because a lot of it has been internalized, especially in terms of probes. So this provides us with some protection. We also have the growth in volume, especially in the growth in the participation of gas, and this tends to reduce this cost per barrel. So in practice for this year, it is almost one thing neutralizing the other, and it is practically the same.
Our expectation in the long term or short term, it is as this gas production increases and the production scale for oil, especially with the increase in production from Polo do Sabiá, these are areas with greater production per well and lower costs. So these costs per barrel will go down over time. So that is our short term expectation. But in the very long term, obviously it really depends on the evolution and the secondary recovery. There is the trend to increase the recovery of reserves, and this usually contributes to the cost, and the cost has this increasing trend. But in the long term, when you look at each field, as they become more mature, there is an increased cost per barrel, and then the strategy is always to renew the portfolio to be able to deal with this.
We are going to end the Q and A session.
I am going to ask Marcelo to make his final remarks.
I wanted to thank everyone. We are very satisfied with what we have done, and we are working a lot so that over the next quarters and years, we can continue to deliver not only expressive results, but also increase the production of the company, and if prices are favorable, also increase productivity. Thank you and have a great day.
Thank you.