An exploration and production contract inked Feb. 5 by Petroleo Brasileiro SA (Petrobras) with Senegal for the exploration of two blocks means that the Brazilian state-owned firm now operates in five African countries: Angola, Libya, Tanzania, Equatorial Guinea, and Nigeria.
Petrobras in early 2006 signed agreements in Angola to explore blocks 15 and 18 in the Congo basin, Block 6 in the Kwanza basin, and Block 26 in the Benguela basin. Petrobras operates all of the blocks except Block 6.
The Brazilian company also holds interests in oil-producing Block 2 and exploration Block 34.
As operator of deepwater Block 18, it has a 30% interest in the unexplored part of a high-potential area. The other sector of that block contains the BP PLC-operated Plutonio project, a collection of several discoveries with 750 million bbl of reserves.
The Petrobras group’s signing bonus was $1.1 billion. Participants are Sinopec 40%, Sonangol 20%, and Falcon Oil and the Gema Group 5% each.
Petrobras’s strategy contrasts with that of the state oil companies of Venezuela and Mexico, which are involved in E&P activities only in their home countries.
Libya focus
Petrobras has operated in Libya since January 2005, when the company was among winners in the first round of bids held by Libyan National Oil Corp. (NOC).
As a result it acquired the oil and gas exploration rights and a share in production of Area 18, consisting of four blocks that cover 10,307 sq km. The area is in 200-700 m of water in the Mediterranean off northwestern Libya.
Petrobras is operator with 70% interest. The production sharing agreement provides for 5 years for the exploration stage and 25 years of production rights shared with NOC.
Petrobras commissioned Wavefield Inseis to shoot a 3D seismic survey starting in the first quarter of 2007.
The 850 sq km survey in the Pelagian basin will be done by M/V Geowave Commander, which has a 10-streamer capacity.
Tanzania block
The Brazilian company has been in Tanzania since June 2004, when it signed an agreement with state Tanzania Petroleum Development Corp.
The agreement covers Block 5, a 9,250 sq km area in 300-3,000 m of water in the Mafia basin.
Petrobras took part in and won the first round of bids opened by the Tanzanian government, in 2001, and now has 100% interest in the concession.
The contract term was for 4 years of activity, including seismic surveys, geological studies, and basin assessment, and may extend for two periods of exploration that total 7 years.
Petrobras won 100% interest in Block 6 in the third bidding round in May 2005. The production sharing contract for this block is being negotiated.
Equatorial Guinea
Petrobras acquired a 50% interest in the Block L production apportionment contract off Equatorial Guinea in January 2006.
The block covers 4,250 sq km in 500-2,200 m of water in the deepwater Rio Muni basin.
Petrobras purchased the interest from the venture’s other participants, whose new shares are now divided as follows: Chevron Equatorial Guinea Ltd. 22.5%; Hess Equatorial Guinea Resources Inc. 12.5%; Energy Africa Equatorial Guinea Ltd. 10%; and Sasol Petroleum International (Pty.) Ltd. 5%.
Chevron will continue as operator, but Petrobras has the option of becoming operator if a commercial discovery is made. Block L is near Hess-operated Block G, where eight oil fields have been discovered, including Ceiba already on production.
Niger Delta
Petrobras began deepwater operations off Nigeria in 1988.
The holdings should begin making a valuable contribution to the company’s international production when giant Agbami oil field and Akpo gas-condensate field start producing in 2008. The company’s share in these operations will be around 105,000 b/d to Petrobras’s production, making the Nigerian unit one of its largest producing centers outside Brazil in the short and medium term.
Agbami is on OPL 216 operated by Chevron, and Akpo is on OPL 246 operated by Total.
Petrobras also has interests in OPL 250 and 324. The former is in partnership with operator Chevron, Shell, and ConocoPhillips, and the latter is in partnership with Statoil and ExxonMobil.
OPL 324 is the first Petrobras-operated block in deep water off West Africa, and drilling began in October 2004 in a regional record 2,525 m of water.
Ultimate recovery from Agbami could reach 1 billion bbl of light, excellent quality oil. The field extends as far as neighboring OPL 217 and has been joined to OPL 216 to form a partnership including Petrobras, Chevron, and Statoil, with Nigerian concessionaires NNPC and Famfa Oil Corp. Development is under way, and production is expected in 2008.
Total is in charge of Akpo operations. Petrobras is responsible for 40% of the investments, and South Atlantic Petroleum Ltd., Lagos, is concessionaire. The field is in an advanced development stage and should start producing in 2008.
Two other oil fields, Egina and Preowei discovered in 2003, are being assessed.