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Petrobras Makes Oil Discovery in Sul de Guará, Offshore Brazil

Brazil’s state controlled oil company, Petrobras, has announced the discovery of good quality oil in the third well drilled in the Santos Basin pre-salt cluster’s Sul de Guará region.

According to the Rights Transfer contract, Petrobras is entitled to produce up to 319 million barrels of oil equivalent in this area.

This discovery well, 1-BRSA-1045-SPS (1-SPS-96), lies 320 km off the coast of the State of São Paulo and is located in the southern portion of Sapinhoá Field at a water depth of 2,202 meters.

Cable tests were used to confirm that the discovery was good quality oil (around 27º API). A sample was taken from carbonate reservoirs below the salt layer.

Petrobras said that after the completion of drilling, a formation test will be conducted to evaluate the productivity of the oil reservoirs, in line with the activities and investments set out in the Mandatory Exploration Program annexed to the Rights Transfer Contract.

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Petrobras Announces New Discovery in Carioca Area, Offshore Brazil

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Petrobras issues the results of the drilling of another well in Carioca area, situated in Block BM-S-9 which confirms the potential of the exploration area.

The new well named as 4-SPS-81A (4-BRSA-973A-SPS), commonly known as Abaré, is settled 35 km south of the discovery well 1-BRSA-491-SPS (Carioca) and 293 km from the coast of the State of São Paulo.

This new discovery was proven by means of good quality oil sampling of close to 28o API, by cable test in carbonate reservoirs of approximate 4830m deep. A formation test in the interval is estimated to be performed in order to evaluate the productivity of such reservoirs.

In addition to that, it is also in progress a long term test in well 3-SPS- 74 (Carioca Northeast), which is a well connected to the FPSO Dynamic Producer. The outcome indicates a potential for production of approximately 28,000 barrels per day, which is above the initial estimates. Currently the well produces a flow of 23,400 barrels per day, in face of the restrictions imposed by ruling of ANP (National Agency of Petroleum Natural Gas And Biofuels).

In addition to the discovery well, four other wells were drilled and two formation tests were performed in the area of the Plan of Discoveries Assessment of Carioca. Such activities complied with all the commitments made with ANP.

Based on the results found in the Carioca area, the Consortium requested ANP to postpone the closing of the Plan of Discovery Assessment and the Announcement of Commercial Viability, which were originally estimated to November 2011.

The new deadline shall be used to perform the activities not provided in the original program: drilling of up to three exploration wells and a long term test.

ANP authorised the review of the Activities and the Schedule for the Plan of Discovery Assessment PA-1-SPS-50 (Carioca), with the introduction of additional operations, and the deadline of the Announcement of Commercial Viability was postponed to December 31, 2013.

The extension of the deadline for the Assessment Plan does not alter the plans and the schedule of the Consortium in relation to the implementation of the production development project.

The Consortium of Block BM-S-9, operated by Petrobras (45%) in association with BG E&P Brasil (30%) and Repsol Sinopec Brasil (25%) will give continuity to the engagements of the Plan of Discovery Assessment approved by ANP.

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Petrobras production hurt by ‘global bottleneck’ for rigs

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Oil workers of the government-run Petrobras celebrate on the P-50 rig after it started producing off Brazil’s south Atlantic coast. (Photo: Patricia Santos, Associated Press)

Petroleo Brasileiro SA, Brazil’s state-controlled oil company, will finish 2011 at the lower range of its production target after a “global bottleneck” delayed rig deliveries, said its chief executive officer.

Petrobras will be within 2.5 percent of its 2.1 million barrel-a-day target for domestic crude production, CEO Jose Sergio Gabrielli said today in an interview at the Global Economic Symposium in Kiel, Germany. Rio de Janeiro-based Petrobras received seven of the 13 drilling rigs it expected this year from international suppliers, he said.

“The ramp up takes time and it very much depends on the drilling capacity we have, and drilling capacity requires drilling rigs,” Gabrielli said. “It’s a global bottleneck.”

Petrobras plans to more than double Brazilian oil production over the next decade as it develops the largest discoveries in the western hemisphere since Mexico discovered the Cantarell field in 1976. Gabrielli said Petrobras is prioritizing Brazilian-built rigs and platforms to decrease dependence on foreign suppliers.

More stringent safety measures by Brazil’s oil regulator also hurt production growth, Gabrielli said.

Petrobras gained 3.8 percent to 18.90 reais at 3:17 p.m. New York time in Sao Paulo trading. The stock has dropped 31 percent this year, more than the 24 percent fall in Brazil’s benchmark Bovespa index.

‘Move to Brazil’

Oil companies from Europe and China are seeking to enter or expand operations in Brazil, and recent announcements that Anadarko Petroleum Corp. and Exxon Mobil Corp. are selling assets in the Latin American country doesn’t indicate an exodus of foreign producers, Gabrielli said.

“I don’t think there is a pattern of companies trying to move out of Brazil,” he said. “To the contrary, there are a lot of companies that want to move to Brazil now.”

The U.K.’s BG Group Plc and France’s Total SA want to expand operations in Brazil and Chinese companies want to enter the market, Gabrielli said. Gabrielli didn’t specify which Chinese companies are eyeing Brazil.

OGX Petroleo & Gas Participacoes SA, the oil company controlled by billionaire Eike Batista, is considering the purchase of Brazilian blocks from Anadarko because it is unknown when Brazil will sell new exploration areas, Chief Executive Officer Paulo Mendonca said today.

Anadarko’s Assets

Anadarko, the largest U.S. independent oil and natural-gas company by market value, wants to sell all its blocks in Brazil, a director at the nation’s crude regulator said Oct. 4. Brazilian oil deals are accelerating as the government postpones selling new areas.

Royal Dutch Shell Plc and Chevron Corp. sold stakes in Brazilian fields in the past month and Exxon, the world’s biggest oil company, wants to divest a 25 percent stake in an offshore Brazilian prospect after drilling two wells that failed to find crude.

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