By an OGJ correspondent
RIO DE JANEIRO, Aug 20 -- Shell Brasil SA (Petroleo) has placed an order for a drilling and production rig, which will be used to begin producing oil from its find on Block BC-10 in Bijupira-Salema field in the prolific Campos basin, off Brazil. The well lies in 1,924 m of water 110 km off Rio de Janeiro state. The pioneer well, 1-SHEL-2-ESS, was spudded Dec. 11, 2000 by the Stena Tay semisubmersible drilling rig. Shell said it expects to be producing about 70,000 b/d of oil by mid-2003.
The production unit will be a floating production, storage, and offloading vesselto be renamed "FPSO-Fluminense"which is being converted from an oil tanker in a Singapore shipyard at a cost of $250 million. It is expected to arrive at Bijupira-Selema field in April or May 2003.
Bijupira-Salema production will make Shell the first foreign oil company to produce oil in Brazil since 1997 when oil exploration was open to companies other than Petroleo Brasileiro SA (Petrobras), which held a monopoly in exploration and production from the state company's founding in 1953.
Shell said it plans to invest $1 billion in oil and gas exploration and production in Brazil during the next 4 years, primarily in developing Block BC-10. Shell's purchase of Enterprise Oil PLC earlier this year included its Brazilian subsidiary, for which Shell paid $700 million and assumed its 80% ownership interest in Block BC-10 (OGJ Online, Apr. 2, 2002). Petrobras and Mobil Exploração Desenvolvimento Ltda. hold the remaining interests in the block.
Shell's exploration activities in 15 blocks throughout Brazil, either alone or in association with other companies, have already required investments of about $300 million. In 10 wells drilled in the Campos and Santos basins, there were 7 discoveries that are being evaluated.
One of these is a large oil reservoir 200 km southeast of Rio de Janeiro on Block BS-4 in the northern part of the Santos basin off Brazil. The discovery well, 1-SHEL-4-RJS, drilled in February 2001, also by the Stena Tay drilling unit, encountered 68 m of net oil pay in Tertiary deepwater sands. An appraisal well, 3-SHEL-8-RJS, was drilled in 1,557 m of water to a TD of 2,500 m. It reached the reservoir objective in early November 2001, encountering 97 m of net oil pay.
The estimated flow-test was 3,000 b/d, and first projections indicate potential reserves of 300-500 million bbl. Shell operates the Santos basin block and has a 40% interest; Petrobras holds 40%; and ChevronTexaco Corp. 20%.
The company said the Santos crude is heavy, however. At 15° gravity, it is heavier than anything currently produced in Brazil. The heaviest that Petrobras currently handles is 19° gravity in Marlim and 18° gravity in Albacora giant fields. Technical problems associated with heavy oil make it costly to produce, and Shell executives said the company would produce its Bijupira-Salema Campos basin offshore discovery first because that oil is lighter.