Petrobras announced a new frontier in its petroleum resources today which is located in the Espírito Santo, Campos, and Santos Basins but at a more profound level in so-called pre-salt rocks. Synoptyically this area is some 800 km long and 200 km wide, and is found in water depths between 2,000 to 3,000 meters. The volume estimated in the so-called Tupi accumulation which is only a small area of the new frontier, could increase Brazilian gas and oil reserves from 14bn barrels to around 21bn barrels (an increase of 50%).
To date, Petrobras is the only company that has drilled, tested, and evaluated pre-salt rocks. Just the second well located in the BM-S-11 block in the Santos Basin shows a recoverable volume of 28o API light oil of around 5-8bn barrels of oil and natural gas. Petrobras as the area operator holds 65% of the working interest, while British group BG hold 25%. The BG Group has confirmed other successes in the Tupi Sul appraisal area as far back as September 2007. 10% of the holding are held by Galp Energia of Portugal. At that time BG Group Chief Executive Officer, Frank Chapman said:
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"These are excellent results from the Tupi Sul appraisal well which maintain our 100% success rate in the deep water Santos Basin. This outstanding sequence enhances our confidence in this emerging hydrocarbon province and supports our strategy in the region."
The partners continue to implement their evaluation plan, the key objectives of which are to verify the dimensions and characteristics of the reservoir and to establish the economic viability of development under these specific geographic conditions.
This follows a $1 billion investments over the past 2 years when 15 wells were drilled to reach the pre-salt layers. Eight wells tested yield high commercial value light oil and a significant amount of natural gas.
Petrobras - Innovation & productivity
Petrobras developed new drilling projects to reach the pre-salt layers, at depths of 5,000 to 7,000 meters and more than 2,000 meters of salt have already been traversed. The first well took more than a year and cost $240 million to be drilled. Today Petrobras can drill equivalent wells in 60 days for $60 million, a six fold reduction in time and four fold reduction in costs. Since its creation, Petrobras has discovered 25 billion barrels of oil and natural gas in Brazil, of which 11 billion have already been lifted. As of 2003, Petrobras expanded its activities and sought new exploratory frontiers. As a result of its efforts, the company has appropriated 9 billion barrels in reserves in the past 5 years.
Strategic importance
According to SEEL (Systems Engieering Economics Lab) Brazil's proficiency and progress engineering technique in the field of petroleum exploration has not been afforded sufficient status in the world's media. These latest discoveries, if recovery proves to be economic, will elevate Brazil to the important status of one of the few democratic countries supplying petroleum in expressive volumes to the world market. This has significant strategic implications for Brazil as well as Europe in opening options which can reduce the over-reliance of economies supporting other democracies on unstable geopolitical regions and unreliable suppliers.
Sources:
Agencia Petrobras de Noticias;
Agence Presse Européenne:
British Straegic Review;
The BG Group Media releases:
Photo Credit: Renato Vicenti / Divulgação Petrobras
Notes:
BG Group plc is a global natural gas business. Active on five continents in over 25 countries, it operates four business segments - Exploration and Production, LNG, Transmission and Distribution and Power. BG has interests in five concessions in the deep water Santos Basin: BM-S-9, 10, 11, 50 and 52 and holds operator interests in the BM-S-13 and 47 concessions in the shallow water Santos Basin. BG also holds one onshore concession (BT-SF-2) in the Sao Francisco Basin in Minas Gerais State.
BG has a controlling stake (60.1%) in Brazil’s largest gas distribution company, Comgas.
Posted: 8th November, 2007.
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