Petrobras to start Tupi oil development by 2011

Dec. 17, 2007
Petroleo Brasileiro SA’s development plans for ultradeepwater Tupi oil field off Rio de Janeiro state include a 100,000 b/d early production system to be built by 2010-11, said company Pres. and Chief Executive Jose Sergio Gabrielli De Azevedo Nov. 13 at the World Energy Congress in Rome.

Petroleo Brasileiro SA’s development plans for ultradeepwater Tupi oil field off Rio de Janeiro state include a 100,000 b/d early production system to be built by 2010-11, said company Pres. and Chief Executive Jose Sergio Gabrielli De Azevedo Nov. 13 at the World Energy Congress in Rome.

The company expects full development of the Santos basin field to begin by 2012 once the company collects required initial data.

Following completion of its 1-RJS-646 (3-BRSA-496-RJS) confirmation well in the field, Petrobras announced possible volumes of recoverable 30° gravity oil from Tupi to be 5-8 billion bbl. If Petrobras’s estimates prove out, Tupi would belong in a category with supergiant Kashagan field in Kazakhstan. Industry geologists expect several more appraisal wells will be needed to confirm such volumes.

The discovery well, 1-RJS-628A (1-BRSA-369A-RJS), was found last year in 2,126 m of water in a frontier section of the Santos basin 150 km south of Rio de Janeiro (OGJ, Oct. 6, 2006, Newsletter; see map, Nov. 20, 2006, p. 43). Drilled to a true vertical depth of 19,680 ft, it penetrated an evaporitic salt sequence more than 2,000 m thick. Petrobras said the well flowed 4,900 b/d of 30° gravity oil and 4.3 MMscfd of gas from a deep presalt reservoir through a 5⁄8-in. choke. Petrobras, operator, has a 65% stake, BG Group holds 25%, and Petrogal-Galp Energia 10%.

The confirmation well is 9.5 km southeast of the discovery well. Noble Drilling’s Paul Wolff semisubmersible rig drilled it to 2,166 m, and well tests indicated flows of 2,000 b/d of oil and 65,000 cu m/day of natural gas, with flow limited by equipment and safety factors.

Gabrielli told WEC that Petrobras is “highly confident” about its estimate of the volumes of recoverable oil, which would make Tupi one of the largest deepwater discoveries in recent times and could boost Brazil’s current 14 billion bbl oil and gas reserves “by more than 50%.”

Petrobras said it has drilled 15 wells in its new presalt frontier, which ranges through the Espirito Santo, Campos, and Santos basins, and has tested eight of them producing 28º gravity oil. It said, “Data from these wells, integrated with a major mapping effort, allowed the company to determine…that the presalt rock formations range from an area extending from the State of Espirito Santo to the state of Santa Catarina. It is about 800 km long and 200 km wide and is found in water depths [of] 2,000-3,000 m.”

Gabrielli indicated there may be more oil beyond the Tupi accumulation in the Santos basin, but no figures were offered as to the extent of the reservoir.

He said Petrobras has many rigs under contract that can drill to 3,000 m. “We think it will take 2 years” to create a Tupi development plan. Petrobras is building two other drilling rigs and is in discussions with other contractors to secure rigs.

Costs to develop the project are a key concern because the services market is tight and costs have escalated. “We have very high pressure and low temperature of the oil. Stabilization of casing is a challenge and so is the hardness of the rock,” Gabrielli said.

Petrobras had not accounted for Tupi in its $112.4 billion strategic business plan for 2008-12 published earlier this year.

Gabrielli declined to comment on whether Brazil could join OPEC with this latest addition to its reserves, saying that was a decision for government. “We planned to increase refining capacity by 1 million b/d by 2015 before we discovered Tupi, and that would make us self-sufficient. We are probably going to export more oil products than crude oil.” This decision, however, would depend on economics, he said.

Brazil aspires to produce 4.5 million b/d of oil by 2015 with Tupi coming on stream. Prior to that, its target was 2.3 million b/d. Refining capacity is expected to leap to 3.5 million b/d from 1.5 million b/d by 2015.

“Brazilian consumption is 1.8-1.9 million b/d, and as we increase refining capacity we think that consumption will grow too,” Gabrielli said.

Gabrielli attributed high oil prices to higher demand than supply and a tight balance between the two. “There is a large movement in the capital markets and a weakness of the US dollar, and so some are finding it hard to cope with price increases. There is also a shortage of refining capacity.” He said price volatility will continue in the short term.