Shell eyes mid-2003 start-up for Brazilian development

Dec. 16, 2002
Royal Dutch/Shell Group's Brazilian unit is targeting a mid-2003 start-up of the first commercial oil development by a foreign company in Brazil since demonopolization of the country's petroleum industry began in 1997.

Royal Dutch/Shell Group's Brazilian unit is targeting a mid-2003 start-up of the first commercial oil development by a foreign company in Brazil since demonopolization of the country's petroleum industry began in 1997.

Its efforts in pursuing development of the adjoining Bijupirá and Salema oil fields in the deepwater Campos basin comprise the capstone of Shell Brasil SA's initiatives in Brazil's upstream sector.

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Shell also is pressing exploration of 14 blocks throughout Brazil either alone or in association with other companies (see table). These projects have called for investments of about $300 million to date. The company has participated in the drilling of 10 wells in the Campos and Santos basins; of these, 7 discoveries are being evaluated, including an apparent large oil find in the offshore Santos basin (OGJ Online, Aug. 20, 2002).

In all, the company plans to invest a total of $1 billion in oil and gas exploration and production in Brazil during the next 4 years, primarily on development work on Block BC-10, home to Bijupirá-Salema fields.

Shell's purchase of UK independent Enterprise Oil PLC in May included its Brazilian subsidiary, for which Shell paid $700 million and assumed its ownership interest in Block BC-10 (OGJ Online, Apr. 2, 2002). Petrobras and ExxonMobil Corp. unit Mobil Exploração Desenvolvimento Ltda. hold the remaining interests in the block.

Michiel Kool, Shell Brasil exploration and production vice-president, told OGJ that first oil output of 70,000 b/d is scheduled for mid-2003 at Bijupirá-Salema. He estimated the total project investment to date at $600 million.

Shell is the operator (80%) in a joint venture with state-owned Petroleo Brasileiro SA (20%) in the adjoining fields in the offshore Campos basin, home to 80% of Brazil's oil production and a slew of deepwater records. Petrobras has remained aggressively active in exploration and development off Brazil, solo and in partnership with foreign companies, even after its 44-year monopoly ended 5 years ago.

Taking over

After acquiring Enterprise Oil, Shell inherited the operatorship of the Bijupirá-Salema development project, noted Shell Brasil's Patricia Garcia.

Both Bijupirá and Salema were discovered by Petrobras in 1990 and are estimated to have reserves totaling 170 million bbl of oil. Both fields have been extensively delineated.

A total of 11 wells have been drilled to date, and the fields' area has 3D seismic coverage. An early pilot production program involving three wells was conducted on the fields during 1994-2000, producing 24 million boe during that period.

Enterprise in April 2000 signed an agreement farming in as operator of the project, initially in partnership with Brazilian firm Odebrecht Oil & Gas Ltd. (OGJ, Apr. 17, 2000, p. 42)

The Shell official told OGJ that "gaining control of Enterprise Oil was one of the biggest challenges for Shell, because the Brazilian subsidiary (of Royal Dutch/Shell) was smaller than the Enterprise Oil subsidiary in Brazil, and this created serious logistic hurdles and required a lot of creativity.

The Sahara very large crude carrier—one of the 15 largest tankers in the world, with an oil storage capacity of 1.3 million bbl—is to be converted into a floating production, storage, and offloading vessel and renamed the Fluminense for installation as part of the Bijupira-Salema fields complex development off Brazil. Photo from OGJ archives.
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"It was like a sardine trying to eat a huge fish," added Garcia, a former Enterprise Oil official.

Project details

Bijupirá and Salema fields lie in 450-800 m of water. The subsea development will include 15 (9 production and 6 water injection) wells tied back via manifolds to a floating production, storage, and offloading vessel.

The FPSO will have a production capacity of 70,000 b/d of oil and 75 MMscfd of natural gas and a storage capacity of 1.3 million bbl.

The Fluminense FPSO is being converted from an oil tanker at a Singapore shipyard. The conversion will cost $250 million. It is expected to arrive at Bijupirá-Salema in April or May 2003 (OGJ Online, Aug. 30, 2002).

The Bijupirá development will use two subsea manifolds to commingle the flow from up to 7 production wells. The manifolds will be located 2.2 km from the FPSO.

The Salema development will use one subsea manifold to commingle the flow from 3 production wells. This manifold will be located 2.4 km from the FPSO.

Gas will be exported using the existing pipeline from the Bijupirá area to the Petrobras P-15 installation.

Oil will be stored onboard the FPSO for lightering by tankers for export.

Modec International LLC, owner-operator of the FPSO and a joint venture of Chicago-based FMC Technologies Inc. and Tokyo-based Modec Inc., last year won the $290 million contract to provide the FPSO and related subsea equipment (OGJ, Aug. 6, 2001, p. 9).

Reservoir characteristics

"The Bijupirá and Salema crude oil is relatively light (28º gravity and 31º gravity, respectively) and deposited in an Eocene age sandstone reservoir of Carapebus formation," Garcia said. "Artificial lift will be required to raise the reservoir fluids to surface for processing, with reservoir pressure maintained by the injection of high-pressure seawater to assist oil recovery."

The producing horizon is a stratigraphic-structural trap that extends over Lower and Middle Eocene marine turbidite sandstones at a depth of 2,740 m. Gross reservoir thickness is 12-44 m with an average of 31 m.

The areal extent of Bijupirá and Salema fields is being delineated by an appraisal-development program.

So far 10 wells have been drilled in Bijupirá field by Houston-based Diamond Offshore Drilling Inc.'s Ocean Yorktown semisubmersible. The rig will be moved to Salema field before yearend to start drilling the 5 remaining wells, Garcia said.