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Lloyds List: Petrobras to invest in nine deepwater units over three years

Published: Jul 18, 2006

EXTRACT: It is also participating in Shell’s BC10 project, now renamed Parque das Conchas, which involves developing the Abalone, Ostra, Argonauta and Nautilus oil fields.

THE ARTICLE

PETROBRAS expects to install up to nine deepwater oil production units from 2007 to 2010 to boost Brazilian production to 2.37m barrels per day, writes Martyn Wingrove .

The state oil company will also need to deploy another 15 production systems in the five years after 2010 to ramp up domestic output to 2.8m bpd by 2015.

The Rio de Janeiro-based oil and gas group intends to invest $87bn over the next five years, $75bn of this in Brazil and the rest in other parts of Latin America, West Africa and the Gulf of Mexico.

Around 56% of this capital expenditure will be on exploration and production, 26% on downstream operations, 9% in gas and the other 9% in petrochemicals, distribution and corporate activities.

With Brazil self sufficient in oil, Petrobras’ focus has moved to natural gas and developing these resources off the country’s coastline.

There will be plenty of associated gas coming from the growing list of oil projects, but for the first time Petrobras has a portfolio of non-associated gas developments, based around discoveries in the Santos basin.

The company’s deepwater oil projects will see the most expenditure in the next five years and will involve several new floating production units and networks of subsea systems.

‘We are producing 1.88m barrels per day off Brazil, but we have an annual decline rate of 9%,’ Petrobras’ president and chief executive Jose Sergio Gabrielli de Azevedo said in London.

‘So by 2011 we will have to add 1.1m bpd of production in new fields just to keep production stable. We expect to increase production capacity by 1.8m bpd but really production will grow by just 0.7m bpd.’

Petrobras’ constant challenge is to find and develop fields to keep output stable and Brazil self-sufficient as its consumption continues to grow to 2m bpd by 2011.

‘We will increase production as a consequence of new platform production systems, the use of new technology to reduce the decline and increase recovery factors,’ Mr Gabrielli told investors.

His company’s overall oil and gas production should grow 7.8% per annum until 2011 under its investment plans, with Brazilian oil still providing the bulk of the growth.

In 2007, the New York and Madrid-listed company intends to start production from the P-52 and P-54 platforms on the Roncador field.

There will also be the second floating production, storage and offloading vessel on the Espadarte field, leased by Modec, and an FPSO on the Golfinho field, Saipem’s Cidade de Vitoria, coming on stream.

For 2008, Petrobras has brought forward its plans to install a third FPSO on Golfinho that will raise production capacity on this light oil field to 300,000 bpd, but it has pushed back installation of the Marlim Leste production unit into 2009.

The state group will need to tender and award contracts soon for the third Golfinho FPSO to keep to this fast-track schedule and it also expects the P-51 production semi-submersible to come on line on the Marlim Sul field in 2008.

Also in 2009, Petrobras expects the Frade FPSO to start pumping out oil and in 2010 it is looking to install a floating production system (P-57) on the Jubarte field as a second phase of development there.

‘After 2011 we have many other projects, which will have a combined production capacity of at least 500,000 bpd,’ said Mr Gabrielli.

This will include the P-55 platform on Roncador, plus a fourth module on one of Brazil’s largest oil fields.

Petrobras could deploy the P-56 production unit and a fourth module on Marlim Sul. It could also install two units on the large Papa-Terra field, discovered last year in the Campos basin.

The Rio de Janiero-based firm may also start developing the Cachalote, Baleia Franca and Baleia Azul fields before 2015.

It is also participating in Shell’s BC10 project, now renamed Parque das Conchas, which involves developing the Abalone, Ostra, Argonauta and Nautilus oil fields.

Mr Gabrielli hopes investment in these projects will change the nature of the company’s oil output so that around 25% of the crude produced off Brazil will be a light oil.

The company’s gas development strategy could see gas output surge to 70m cu m per day by 2010, with development of Urucu, Peroa, Cangoa and Canapu fields underway by 2008.

In its plans Petrobras expects the Mexilhao, Tambau and Urugua fields, plus three unnamed gas discoveries, to be developed by 2010.

‘We will be investing $22.1bn in the total gas chain to increase production of non-associated gas and to build a liquefied natural gas regasification unit,’ said Mr Gabrielli.

‘For the first time we have a portfolio of non-associated gas projects that are in our investment plan.’

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