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Brazilian pre-salt play a stunner

Brazilian pre-salt play a stunner
Petrobras is totally reshaping Brazil's offshore petroleum industry with a string of spectacular pre-salt (sub-salt) oil discoveries which have, in less than two years, catapulted South America's leading producer up the international hydrocarbon reserves league table.

Petrobras is totally reshaping Brazil’s offshore petroleum industry with a string of spectacular pre-salt (sub-salt) oil discoveries which have, in less than two years, catapulted South America’s leading producer up the international hydrocarbon reserves league table.

It was the Tupi discovery of late-2007 that first grabbed the headlines, since when a string of major finds have been logged.

Last month alone, three finds were announced, including the latest pre-salt find by Petrobras, which was drilled on block BM-S-9, The Iguacu-1 well, 4-BRSA-709 (4-SPS-60), not only encountered hydrocarbons, oil samples were taken, too.

Iguacu is located in the Carioca area (1-SPS-50) in 2,140m (7,020ft) of water and further reinforces the view at Petrobras that the company has yet another large pre-salt discovery on its hands.

It was in November, 2007, that Petrobras told the world about its pre-salt breakthrough with a massive discovery known as Tupi. The company said reserves were believed to be about 5-8billion barrels of oil and that the reservoir was overlaid by some 2,000m of salt.

Besides Tupi and the latest find, other significant Petrobras-operated Santos pre-salt finds include Bem-te-vi Caramba, Carioca, Guara, Iguacu, Jupiter and Parati. In addition, there is the ExxonMobil-operated Azulao discovery.

Brazil’s pre-salt play is currently estimated to cover an area measuring 200km (125 miles) by 80km (50 miles) and reaching north to south through the Espirito Santos, Campos and Santos basins.

Reserves estimates vary widely. The Carioca area alone is said to hold some 25-40billion barrels.

Iara, the next most recent Petrobras-led discovery to be announced prior to just-announced Iguacu, is a light-oil find that is estimated to cover some 300sq km (117 square miles). No estimate of possible volume has been released.

Meanwhile, first find Tupi is now on the road to development, with the first contracts issued. A key deal is the $65million pilot order for subsea trees and associated control systems placed with Aker Solutions late-2008.

That order covers nine vertical subsea trees, associated subsea control systems and two tool sets, together with related accessories and spare parts. Current speculation is that, ultimately, Tupi may require 100 wells, therefore many more trees. Likely target production is about 200,000 barrels per day.

Another key contract is the pilot floating production unit contract, which went to Modec, again last year.

Meanwhile, Petrobras has embarked on a two-stage test of the giant discovery. Phase one is a well test that was scheduled to start on April 21. This is planned to produce up to 30,000bpd.

This is to be followed by a full Tupi pilot based on a 100,000bpd capacity FPSO scheduled to start production in December, 2010, based on a suite of five production wells and three injectors.

Pilot production on the subsequent Guara and Iara discoveries is also already in planning, with start-ups pencilled in for 2012 and 2013. Each will feature a 120,000bpd FPSO.

Petrobras currently says that production targets are 100,000bpd in 2010; 219,000bpd by 2013; 1million bpd by 2017 and 1.8million bpd by 2020.

The company has indicated, too, that over the period 2015-16, eight standard FPSOs will be launched under pre-salt phase 1A. This ties in with news that Petrobras is preparing to place orders for eight such units with Korean shipyards (See Page 26).

Based on current reserves estimates, Petrobras plans to instal 23 floating production units and two hubs in the Santos basin by 2020. A further two may be installed in the Espirito Santo basin.

Commenting on the Brazilian pre-salt programme, analyst Mauro Andrade, of Deloitte, echoed Matt Simmons, chairman of investment bank Simmons & Company International, by saying that the wells drilled to date are very expensive.

“Excluding the first well, which took more than a year and $250million to drill, the average drilling time for the sub-salt in Santos is around 75-80 days,” said Andrade.

“The first well on Bem-Te-Vi was more than 200 days; Carioca, which was also among the first … that was about 160 days. Tupi itself was about 370 days. Now it seems that the new wells being drilled are around 75-80 days duration, depending on the total depth. This is crucial as it’s vital to get costs down. A well that takes 75-80 days in Santos these days must cost in the range $75-100million.”

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