A consortium of majors has won a 35-year production-sharing contract to develop the Libra presalt oil discovery in the Santos basin offshore Brazil.
Brazil’s state-owned Petroleo Brasileiro SA (Petrobras), Royal Dutch Shell PLC, Total SA, China National Petroleum Corp., and China National Offshore Oil Corp. comprise the group of companies that will attempt to recover 8-12 billion bbl of oil, as estimated by Brazil’s National Petroleum Agency (ANP). In 2010, ANP initially estimated the Libra discovery could hold as much as 15 billion bbl of oil, more than 2.4 billion bbl greater than the country’s existing reserves (OGJ Online, Nov. 5, 2010).
The ultradeepwater Libra accumulation, one of the largest in the world, is 105 miles off Rio de Janeiro. The block covers 1,550 sq km in 2,000 m of water. The reservoir depth is 3,500 m below the seafloor. ANP estimates that total gross peak oil production could reach 1.4 million b/d.
The PSC is expected to be signed in November. As part of the winning bid, Shell said it will pay its 20% share of the total signing bonus of $1.4 billion and fulfill the minimum work program no later than yearend 2017.
Shell has worked in Brazil for more than a century, with 65,000 boe/d of operated production in 2012. Shell is currently operating two floating, production, storage, and offloading vessels off Brazil—the Espirito Santo at Parque das Conchas and the Fluminense at the Bijupira/Salema fields—and has recently announced projects to expand production at both fields (OGJ Online, July 22, 2013; Oct. 2, 2013). Shell also operates and owns an 80% interest in the BM-S-54 block, where the Gato do Mato discovery is being appraised.
Petrobras holds 40% in the consortium and serves as operator; other partnership interests are Shell 20%, Total 20%, CNPC 10%, and CNOOC 10%.