Peter Howard Wertheim
RIO DE JANEIRO, Feb. 6 -- Oil and gas exploration and production activities in Brazil will increase in the upcoming years as the country beefs up its self-sufficiency efforts. Foreign companies alone are expected to invest $25 billion in E&P during 2007-11.
At least 20 new platforms will be operating by 201013 of them in the Campos basin, which is responsible for 80% of the country's production. Production from the basin averages 1.8 million b/d of oil.
Offshore E&P contributes 81% of Brazil's oil and gas production. About 90% of Brazil's proved oil reserves are offshore, with 64% of the concession areas in deep and ultradeep waters, according to state-owned Petroleo Brasileiro SA (Petrobras).
Research and exploration areas under license include Ceará-Potiguar and Camamu-Almada, in Bahia state, but Espírito Santo and Santos also are proving great stages for new business deals, said Petrobras.
There are 15 offshore fields showing commercial oil and gas in the Potiguar basin7 already in production and 8 under development. Petrobras's Siri field and the Guajá and Salema Branca fields on Block BPOT-100A have been declared commercial and are being developed. Exploration is under way and will continue until 2009 on two additional blocks, BM-POT-11 and BM-POT-13.
In 2006-10, Petrobras plans to invest $1.46 billion in Rio Grande do Norte statealong with Ceará, part of the Potiguar basinfor E&P, natural gas, energy, distribution, safety, and environmental activities. In E&P alone $1.1 billion will be invested in several fields, with emphasis on the expansion of Ubuaram field, which clocked 30 years of production in 2006, and the development of Dentão field and other projects, said Petrobras.
The first two wells in Manati field in the Camamu-Almada basin in South Bahia are producing a total of 1.8 million cu m/day of gas for Petrobras and partners Queiroz Galvão and Rio das Contas of the Norse Energy Norwegian group. Operations are expected to begin this year. The PMT-1 fixed platform is being installed, along with 125 km of pipelines, and a gas treatment plant is in the final stage of construction in the municipality of São Francisco do Conde.
Bahia also holds promise. In Camamu-Almada, 11 blocks are under exploration, operated by consortiums of companies such as Queiroz Galvão, Statoil ASA, Devon Energy Corp., Eni SPA, and El Paso Corp.unusual in that other basins generally are dominated by Petrobras. El Paso has reported six gas and oil finds on its concession Block BMCAL-4. The other blocks are still in the exploration phase, with deadlines of 2008-14, according to National Petroleum and Biofuels data.
Brazil's largest circulation daily, O Globo, reported that Chevron Brazil will invest $3 billion in several areas in Brazil during the next few years, starting to produce 110,000 b/d of oil by 2015 from Frade field, in the Campos basin. Chevron operates Frade with a 51.74% interest in association with Frade Japan, an investment fund.
The private sector Brazilian Institute of Petroleum and Gas (IBP) forecasts that, during 2007-11, some $100 billion will be invested in E&P, of which $25 billion will be from private Brazilian companies and international oil companies.
IBP says 57 companies, including Petrobras, operate in Brazil as a result of the eight licensing rounds. Of the licenses awarded, 17 are in development.
In Campos basin, Devon Energy operates Polvo field in 105 m of water. It is expected to produce 50,000 b/d of oil starting next year, says Devon Pres. Murilo Marroquim. Devon has invested $400 million in Brazil.
Royal Dutch Shell PLC has invested $1.5 billion. Shell was the first multinational oil company to produce crude in Brazil after Petrobras lost its upstream monopoly in 1998. The discovery in the Campos basin's Bijupirá-Salema fields produces 40,000 b/d of oil. Now Shell is working in its two most important production projects: Block BC-10 in the Campos basin and Block BS-4 in the Santos basin, which has been declared commercial (OGJ Online, Jan. 4, 2007).
Norsk Hydro ASA also has invested $400 million and expects to produce 100,000 b/d of oil in the Campos basin by 2010.