OGX expects to reach 1.4 million boe/d in Brazil by 2019

Guntis Moritis
OGJ Production Editor

HOUSTON, June 21 -- In its recently released business plan, OGX Petroleo e Gas Participacoes SA said production may reach 1.4 million boe/d by 2019 from its shallow-water blocks in the Campos basin and the onshore Parnaiba basin, based on a potential resource estimate of 10.8 billion boe.

At that time, it expects to have in its Campos basin blocks 19 floating production, storage, and offloading vessels; 24 wellhead platforms; and 5 tension-leg wellhead platforms.

To date, it said it has discovered 4.2 billion boe in the two basins. This resource could support production of 730,000 boe/d by yearend 2015.

The company noted that it had drilled 52 wells in the past 20 months with an overall success rate exceeding 90%.

In the Campos basin, OGX expects production to begin in October from its first project (Waimea complex) at a rate of 20,000 bo/d from Well OGX-26. Its second project (Waikiki complex) is set to start production in fourth-quarter 2013.

In 2013, the company plans to have three FPSOs (OSX-1, OSX-2, and OSX-3) and two wellhead platforms (WHP-1 and WHP-2) in place with a total of 10 horizontal wells producing 150,000 bo/d from these two projects.

In addition to these three FPSOs, OSX has acquired two very large crude carriers for conversion into two FPSOs (OSX-4 and OSX-5). OGX will lease these FPSOs and expects delivery in 2014. Both FPSOs will have about 1.3 million bbl of storage capacity and a 100,000 b/d oil processing capacity.

OGX expects gas production ramp-up from the Parnaiba basin to begin in second-half 2012. The company has one project covering two accumulations in the PN-T-68 block, which is 46.7% owned by OGX. OGX expects a gross production of about 200 MMcfd (about 36,000 boe/d) in 2013 for the block.

OGX explained that its general development concept for the Campos basin shallow waters envisions each development well to have dry-completions from a wellhead platform tied to an FPSO. It said to expedite the drilling and accelerate production ramp-up, it has a strategy of predrilling with a semisubmersible drilling rig an average of five horizontal wells per accumulation prior to the installation of the wellhead platform. The remainder of the wells will be drilled from the wellhead platform.

OGX expects to produce 4.1 billion bbl from the several oil accumulations it has discovered in the Campos basin and will install 12 FPSOs and 11 wellhead platforms on the blocks.

Its planned production profile is ramp-up during three quarters, 4-year plateau production, and 20-22 year production decline.

Because of the low-GOR, the company plans to use all produced gas for operations and energy generation on the platforms.

OGX expects average field life capital expenditure will be about $2/bbl and operating expenditures will be less than $16/bbl.

Other of its costs estimates include:

• $50 million for predrilling a well from a semisubersible rig.

• $20 million for drilling a well from a wellhead platform in 75 days.

• $15 million for completing a well from a wellhead platform well in 30 days.

• $65 million for subsea flowlines, including production, electrical, gas lift, service, water injection, and test lines.

• $350,000/day for one leased FPSO.

• $160,000/day for one leased wellhead platform

• $85,000/day for operating and maintenance mostly related to an FPSO.

• $3.50/bbl variable unit cost.

• $100 million abandonment cost.

Waimea complex
The Waimea complex is on Block BM-C-41, which is 100% owned by OGX, in 140 m of water and about 80 km from shore. OGX expects to have 3 FPSOs and 2 wellhead platforms operating at the Waimea complex with 28 producing and 14 injection wells.

In 2013, OGX plans to have in operation the FPSOs OSX-1 and OSX-2, as well as the WHP-1, all of which have been secured.

The company said that it had acquired all production equipment for the initial production at the Waimea complex, including wet christmas trees and flexible lines. OGX plans to initially produced 10,000-20,000 b/d/well from three subsea completed horizontal wells to FPSO OSX-1. Two subsea injection wells also will be connected to the FPSO.

It expects production to start in October through an extended well test at Well OGX-26. Before the installation of WHP-1 in first-quarter 2013 and FPSO OSX-2 in second-quarter 2013, it will produce three horizontal subsea wells and four predrilled horizontal production wells during 2012 and 2013.

OGX expects to start operations from FPSO OSX-2 in third-quarter 2013 and have 180,000 b/d processing capacity installed. At that time, it will have seven horizontal production wells on‐stream, with three producing to FPSO OSX-1 and four producing to FPSO OSX-2.

Waikiki complex
The Waikiki complex on Blocks BM-C-39 and BM-C-40, both of which are 100% owned by OGX, is in 100 m of water about 90 km from shore. OGX expects to produce this complex with 1 FPSO, 1 wellhead platform, 14 producing wells, and 8 injection wells.

It said that it has secured FPSO OSX-3 and WHP-2 for this project and expects each of the wells to have a 15,000-20,000 b/d productivity.

Production is to begin in fourth-quarter 2013.

OGX intends to predrill five horizontal production wells during 2012 and 2013, prior to the installation of the WHP-2 in second-quarter 2013 and FPSO OSX-3 in third-quarter 2013.

The company expects that the complex will have a 100,000 b/d installed production capacity in 2013.

Parnaiba basin
To develop its discovered gas in the onshore Parnaiba basin, OGX plans to use vertical wells connected to a gathering system that will transport the gas to a gas processing unit designed for dry gas.

Its first project will bring on stream the Gaviao Azul and Gaviao Real fields in second-half 2012, with production reaching 200 MMscfd in 2013.

OGX expects to connect the gas treatment facility to gas thermal power plants that its affiliate MPX plans to build. MPX holds a 23.3% stake in the concession.

OGX has declared the commerciality of two accumulations (California and Sao Jose) in the PNT-68 block. OGX holds a 46.7% interest in each.

The plan for Project 1 includes 23 production wells, some with recompletions during the production period, at an estimated cost of $340 million (including recompletion costs) and an estimated drilling and completion time of 55 days/well.

The company estimates a $110 million cost for the facilities including a gathering system (lines and manifolds), a production facility for dry gas, and a very short pipeline.

Average operating cost for the field life including operation and maintenance of production facilities, lines, gas pipelines, wells and gas variable costs will be less than 30¢/Mscf, according to OGX.

OGX plans to have 18 production wells on stream in 2013.

Contact Guntis Moritis at guntism@ogjonline.com.

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