State owned Petroleo Brasileiro SA (Petrobras) is pressing its campaign to transform Brazil's Amazonas province into a major oil and gas producing region.
The financially troubled company is banking on production from an accelerated program in the upper Amazon to contribute a growing share to national production.
Oil for the 10,000 b/d refinery at Manaus, which supplies the entire Amazon region with petroleum products, previously had to be shipped in from fields along Brazil's northeast coast.
In 1986, however, Petrobras scored a significant oil discovery along the Urucu River in the upper Amazon basin, boosting hopes for self-sufficiency within the region.
By 1988, Petrobras had spent more than $60 million to explore, develop, produce, process, and transport oil and gas in the Urucu region, one of the most dense, remote jungles in the world.
Lifting costs at Urucu compare favorably with the offshore Campos basin, where Petrobras is pressing the boundaries of deepwater technology (see story, p. 20).
Petrobras's budget problems have left it unable to improve the Amazonas infrastructure.
Reaching Urucu calls for a 31/2 hr flight from Rio de Janeiro to Manaus, then a flight via Fairchild 227 aircraft to Urucu in 1 hr, 40 min.
The company's slashed budget also forced it to cut personnel at Urucu.
However, Petrobras perseveres on the rugged Amazon jungle frontier, in the recognition that the country's dense interior may be crucial to sometime realizing its dream of national crude self-sufficiency.
1989 PROGRAM
In 1989, Petrobras spent $95 million for exploration and development in the upper Amazon, or Solimoes, basin.
That effort resulted in four oil and gas discovery wells and five delineation or development wells.
Solimoes basin production in 1989 totaled about 1.2 million bbl.
Currently, Petrobras has one modular helirig and one conventional rig working in the Urucu area.
Most recently, it drilled the RUC-16D wildcat and an extension, LUC-8, which yielded better oil and gas flow rates than expected.
Petrobras expects to have Urucu field fully delineated within a year.
The company is optimistic that Urucu reserves are larger than originally estimated.
AMAZON GEOLOGY
In Brazil, Paleozoic sedimentary basins cover about 3 million sq km. The most important of these is the Amazonas province, covering more than 1.2 million sq km of rain forest.
The Amazonas is divided into three basins-Upper, Middle, and Lower-defined by arches.
The Upper Amazon/Solimoes basin is separated from the Middle Amazon basin on the east by the Purus arch and from the Acre basin on the east by the Iquitos arch.
While featuring essentially the same basin fill as the Middle Amazon basin, the Solimoes basin's tectonic features are substantially different, reflecting its greater proximity to the Paleozoic Hercynian orogenic zone (OGJ, Aug. 1, 1983, p. 109).
The major structural trend found to date is the northeast-southwest Jurua trend, characterized by anticlines, flexures, and reverse faults presumably resulting from compression of a major shear zone cutting diagonally across the basin.
A concerted exploration effort in the Amazon province began in the mid-1950's, resulting in an oil discovery at Nova Olinda in March 1955. Appraisal drilling proved the field noncommercial.
A 1959 strike at Autas Mirim in Amazonas state yielded test production from a thin zone for 2 years before the well was shut in.
Later exploration led to development of the Jurua gas trend in the 1970's, opened by the 1-JR-1-AM discovery in 1978. Several other discoveries in the Jurua River area proved gas reserves pegged a few years ago at 282 bcf (OGJ, Jan. 19, 1987, p. 26).
Improvements in seismic technology helped spur the first discovery of oil in the Upper Amazon in 1986 (OGJ, Oct. 27, 1986, Newsletter). Petrobras 1-RUC-1-AM, drilled to 8,170 ft in the Urucu River area 112 miles south of Tefe, yielded 950 b/d of 43 gravity oil.
In the Urucu area, features are distinguished as echelon structures associated with thrust fault trends generated during the Jurassic-early Cretaceous compressional tectonic regime. Structures average 10 sq km in areal extent with closure of an average 120 m.
Pay in the Urucu area exclusively consists of sandstones in the Carboniferous Monte Alegre and Itaitube formations and Devonian Curua formation/Oriximina member.
Pay zones occur typically at about 2,400 m with pay thicknesses averaging 25 m. Porosity range is 15-22%, permeability 60-2,100 md. Reservoir drive is a gas cap and water influx.
SOLIMOES BASIN ACTION
Exploration/development in the Solimoes basin has been largely exempted from recent Petrobras budget cuts forced by the collapse in oil prices and Brazil's financial woes because the company regards the program as a priority.
Wagner Freire, Petrobras exploration and production director, pegs the Urucu area yield at 10 discoveries to date, including Rio Urucu, Leste de Urucu, Carapanauba, and Cupiuba fields.
In all, Petrobras has shot 5,200 line km of seismic surveys, including 3D, in the Urucu area. Seismic data identified all the well locations, including seven undrilled prospects near discoveries. Three of those-1-IMT-1, 4-SUC-2, and 4-CRP-2-have been approved for drilling.
Petrobras's 3D coverage totals 102 sq km at Rio Urucu and 58 sq km at Leste do Urucu.
Rio Urucu is the only producing field. Petrobras has completed 13 wells, with combined productive capacity of 5,300 b/d of oil. Eleven of those wells are producing 4,650 b/d.
Freire estimates Rio Urucu's resource at 322 million bbl of oil equivalent (BOE). Total estimated reserves are 85 million BOE, with 43.5 million BOE proved.
Petrobras last December estimated total resource of the Rio Urucu-Leste do Urucu reservoirs at 400 million BOE, based on 3D seismic data and results from two recent step-outs. Original oil and gas in place for the combined fields are pegged at 170 million bbl of oil and 36 billion cu m of gas.
Logs from 3-RUC-16D-AM show a 40 m thick sandstone bearing oil, gas, and condensate. The well is just west of Rio Urucu field.
Petrobras 3-LUC-8-AM, just east of Leste do Urucu, tapped an 80 m thick gas stringer with gross pay of more than 50 m. The well also cut oil bearing sandstone pay 13 m thick. The first production test of the oil pay yielded a flow of more than 1,600 b/d of 49 gravity crude.
Petrobras estimates recovery at 30% of oil and gas in place for the two fields. Prior to the step-outs, total resource for the two fields was estimated at 280 million BOE.
Rio Urucu's oil is 41-44 gravity with no paraffin, 0.031 wt % sulfur, and a pour point of -9 C. Gas:oil ratio is 270:1. Associated gas contains 68.7 mol % methane and no significant amounts of hydrogen sulfide.
DEVELOPMENT DETAILS
Petrobras is emphasizing directional drilling to minimize environmental effects in the Amazon forest.
Considering that drilling each well vertically would call for deforestation of 70,000 sq m and that final phase development calls for 12 wells in all, directional drilling will have preserved a 770,000 sq m area in the jungle, a Petrobras official said.
Petrobras has trimmed drilling costs in the region.
In 1986, the Urucu discovery well cost $5 million. With investments in operational support, drilling technology, and training, Amazon wells now cost about $3.5 million each. More advanced rigs have helped cut drilling time to an average 45-50 days/well from 80 days/well.
Wells flow naturally from casing perforations.
Urucu production moves to a gathering/separation plant near the RUC-6 well site. Petrobras plans to construct nearby a larger, 10,000 b/d treating plant with design capacity expandable to 20,000 b/d.
The new gathering/separation facilities will include four compressors, each rated at 180,000 cu m/day, to reinject gas.
Currently, all Urucu gas is flared at the rate of about 160,000 cu m/day. Target date for gas reinjection to begin falls in June.
Petrobras plans eventually to install a gas processing plant to handle 600,000 cu m/day, producing 925 b/d of natural gas liquids and 120 b/d of pentanes and higher.
The company is studying the feasibility of laying a pipeline to move Urucu gas to Porto Velho for power generation. Another project under study is a gas pipeline from Urucu to the Solimoes River, where gas would be liquefied and transported via LNG tanker to Manaus for power generation.
After separation, Urucu oil is pumped through a 4 km, 41/2 in., 5,200 b/d capacity pipeline to a terminal at Porto Moura on the Tefe River.
From there, oil moves by barge to Manaus on the Tefe River. During the rainy season, oil also is barged on the Urucu River.
All equipment and supplies for the Urucu area are barged on the Solimoes and Urucu rivers.
By yearend 1989, Urucu cumulative oil production was about 1.1 million bbl. Production began in July 1988 with 10 wells on stream. Production at yearend was about 4,000 b/d of oil and 170,000 cu m/day of gas.
Plans call for four wildcats in the Solimoes basin in 1990. There are no further seismic surveys planned beyond a crew still working in the northern portion of the basin.
Current emphasis is on completing interpretation of 3D seismic data.
RISK CONTRACT STATUS
Brazil's new constitution forbids new oil exploration concessions, but some risk contracts are still active.
In mid-1989, Ste. Nationale Elf Aquitaine took a farmout from Pecten do Brazil Exploration Co. and Japan's Idemitsu Kosan Co. Ltd. covering eight Amazon concessions totaling 85,000 sq km. The first well got under way last September on a block near the Urucu area where Petrobras earlier found oil.
First phase of exploration on the Pecten concessions will end in mid-1991, with an option to extend for 2 years.
Since the first risk contracts in Brazil were signed in 1976, 22 foreign and four domestic companies have participated in a total of 243 risk contracts.
Pecten is the only foreign private company that drilled a commercial oil discovery, Merluza, on a Brazilian concession. A 1982 gas/condensate discovery 180 km off Sao Paulo in the Santos basin, Merluza is under development and due to start up in mid-1991.
SELF-SUFFICIENCY GOAL
The Campos basin has been Brazil's main hope to attain oil self-sufficiency in the 1990's.
However, sharp budget cuts at Petrobras caused by the government's worsening economy have forced the state oil company to back off earlier projections of self-sufficiency (OGJ, July 10, 1989, p. 15).
Until the budget cuts, Petrobras had planned to hike oil production to 1.5 million b/d by 1996, thus making Brazil self-sufficient in crude.
Petrobras in 1989 cut its $2 billion plus budget by more than half, promising not to reconsider unless the government rationalized oil product pricing.
Petrobras had targeted production of 700,000 b/d by October 1989, pushed that target back to December, then abandoned that goal for 1989 as the company's financial predicament worsened.
In November 1989, Brazil produced an average 643,223 b/d of oil and natural gas liquids, down 3,132 b/d from October, because of operating problems in the Campos basin. Once those problems were resolved, production rose to 655,300 b/d in the last 10 days of November from 636,238 b/d in the first 20 days.
By last Nov. 30 Brazilian production reached a record 665,561 b/d of crude and NGL. Production for the month was up 24% from November 1988.
Average production in 1989 through November was 613,548, up 33,835 b/d from the average in 1988.
Brazilian gas production through November averaged 16.5 million cu m/day, of which 13.6 million cu m/day was utilized.
Copyright 1990 Oil & Gas Journal. All Rights Reserved.
