Petrobras 'clarifies' BG statement over Tupi, Guara finds

Eric Watkins
OGJ Oil Diplomacy Editor

LOS ANGELES, Dec. 10 -- Brazil’s Petroleo Brazileiro SA (Petrobras) has taken exception to earlier claims by BG Group concerning the estimated volumes of recoverable oil equivalent, as well as the capital and production costs of the Tupi and Guara fields in the Santos basin off Brazil.

“Petrobras, as the operator of the consortium, reiterates the estimates that have already been announced, of 5-8 billion boe recoverable in Tupi and Iracema (Block BM-S-11), and 1.1-2 billion boe recoverable in Guara (Block BM-S-9),” the firm said, reiterating earlier claims (OGJ Online, Dec. 6, 2010).

The Brazilian firm also reasserted its view of “the economic feasibility of these discoveries at price levels ranging from $35-40/bbl, in accordance with the variables of its Business Plan 2010-14."

Underlining its displeasure with BG Group, Petrobras “also highlights that the disclosure made by BG occurred without the compliance with the rules set forth under the joint operations agreement.”

Operator Petrobras holds a 65% stake in the Tupi, Iracema, and Iara discoveries in BM-S-11 concession. BG holds 25%, and Petrogal, 10%. In the Guara and Carioca discoveries in the BM-S-9 concession, operator Petrobras holds a 45% stake. BG Group holds a 30% stake, and Repsol holds 25%.

BG was not available for comment on the Petrobras statement. However, the difference between the two sets of figures is substantial, with BG’s oil equivalent reserves estimate amounting to less than half of Petrobras’.

The difference emerged following a Dec. 9 statement by the British firm relating to the first two floating production, storage, and offloading vessels in Tupi field and the first FPSO in Guara field.

According to BG, the first FPSO in Tupi field has a production capacity of 100,000 b/d of oil and as much as 177 MMscfd of gas. It started production in October.

BG said the second FPSO in Tupi field is due on stream in 2013 and will have a production capacity of 120,000 b/d of oil and 177 MMscfd of gas.

A similar FPSO will be deployed in Guara and also is due on stream in 2013, BG said, adding that all three FPSOs will be leased.

It said the gas export pipeline with capacity to service all three FPSOs is in place, linking the Tupi area to Brazilian domestic gas infrastructure via the Petrobras Mexilhao platform.

“The three FPSOs are expected to recover total gross reserves of…2.2 billion boe—600 million boe net to BG Group—within the concession periods, utilizing a total of…40 production and injection wells,” BG said, adding that the Tupi concession ends in 2037, and that the Guara concession ends in 2039.

“In light of the outstanding reservoir characteristics and high recovery per well, BG Group anticipates very low unit technical costs for this initial phase of development, amounting to capital costs of $5/boe and operating costs of $9/boe,” the firm said.

Contact Eric Watkins at hippalus@yahoo.com.

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