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Former Brazilian state petroleum monopoly Petroleo Brasileiro SA has signed six more joint-venture exploration agreements for areas off Brazil. These new agreements are with groups led by units of Mobil Corp., Royal Dutch/Shell, Texaco Inc., and Exxon Corp.
Petrobras has signed several such JVs recently, including one with units of Kerr-McGee Corp. and Exxon Corp. (OGJ, July 19, 1999, p. 36) and two with a group comprising units of Coastal Corp., Unocal Corp., and Brazilian firm Ipiranga (OGJ, July 12, 1999, p. 29).
The blocks are part of a group allotted to Petrobras by Brazil`s National Petroleum Agency (ANP) under the country`s demonopolization program. These areas controlled by Petrobras are being opened to private domestic and foreign companies.
The formation of international JVs to explore these six blocks is further evidence of the global oil industry`s hunger for opportunities to enter Brazil`s offshore territory.
Block BES-2
A group led by Mobil Exploracao e Desenvolvimento do Brasil Ltda. signed an exploration agreement with Petrobras to explore Block BES-2 in the deepwater Espirito Santo basin (see map). Interests in the block are: operator Mobil and Petrobras, 35% each; and Unocal Espirito Santo Ltda., 30%.
The block covers more than 500,000 acres in 1,200-4,500 ft of water. The planned work program includes 3D seismic acquisition followed by exploration drilling.
"It is a good strategic fit with Mobil`s global deepwater program," said M. W. Scoggins, president, international exploration and producing, Mobil Oil Corp. "We are optimistic that the block has the potential for the large discoveries that will be needed to justify our investment."
Block BC-10
A group led by Shell Brasil SA has signed up to explore Block BC-10 in the Campos basin. Interests in this block are: Operator Shell Brasil SA and Petrobras, 35% each; and Esso Brasileira de Petroleo Ltda. and Mobil, 15% each.
BC-10 is about 60 miles off Rio de Janeiro in 3,000-7,500 ft of water; it has an area of about 800,000 acres.
The group`s work program for BC-10 also includes seismic acquisition and exploration drilling.
Shell said, "Dependent on the results of seismic and drilling activities, exploration expenditures are likely to be over $100 million in the block. If this work leads to a commercially viable discovery, development costs would (be) $1-2 billion, depending on the size of the find."
Block BC-4 and Frade field
Last month, Texaco Inc., Brazilian firm Odebrecht, and FJPL-a Brazilian firm controlled by Japanese group Nissho Iwai-Inpex-signed an offshore exploration agreement with Petrobras for Block BC-4 and for the adjacent Frade oil field development area (OGJ, July 19, 1999, p. 36).
Texaco will serve as operator of the block, which is about 400 km northeast of Rio de Janeiro.
The group`s work plan for BC-4 includes 441 sq km of 3D seismic acquisition and the drilling of an exploration well. Investment costs for the block are estimated at $42.5 million.
The work plan for Frade includesacquiring about 154 sq km of 3D seismic and drilling one or two wells. The partners envision installing a spar-type production system for the field.
Together, BC-4 and Frade could hold about 1.2 billion bbl of oil, say the partners. Total investment for the two areas is pegged at more than $1.2 billion. And if exploration efforts are successful, the areas are expected to begin producing as much as 100,000 b/d by 2003.
Other blocks
Esso Brasileira inked two other oil exploration and production contracts with Petrobras, for Blocks BP-1 in the Pelotas basin and BFZ-1 in the Foz do Amazonas basin.
Block BP-1 is on the continental shelf of Rio Grande do Sul state in southern Brazil, while BFZ-1 lies on the continental shelf of Amap&#nbsp; state in northern Brazil. Esso will serve as operator of both blocks.
JVs are to be set up once the requirements of the concession contract with Petrobras and ANP have been met.
In Block BP-1, Petrobras and Exxon will hold equal shares; for Block BFZ-1, Petrobras will keep a 40% stake, with Exxon holding the remainder.
BP-1 and BFZ-1 are, respectively, 41,233 sq km and 4,028 sq km in area. BP-1 is the largest concession area held by Petrobras under its partnership portfolio.
The initial exploration program for BP-1 calls for acquisition of 5,000 km of 2D seismic and drilling of one exploration well. Investments for this work are expected to total $25 million.
For Block BFZ-1, the acquisition of 700 km of 2D seismic survey and the drilling of one exploration well are planned, with investments totaling $31 million.
