Back in 2009 I asked a good friend of my late father, who happened to be a long time Petrobras geologist, if he really knew the full potential of the pre-salt, after a while he looked up and said no not really, I know there are big fields out there, probably up to 10 billion boe in some reservoirs, possibly much more...

Well, Petrobras kept on drilling and when Libra was found northeast of the Lula field (5 to 8 billion barrels boe), in 2010, the expectations ran high. Maybe 3.7 billion boe, maybe 15 billion boe. Probably 7.9, those are the numbers the ANP had in 2010. By May 2011 the ANP was downgrading it to 5 billion barrels boe. By the end of 2012, there were already some rumors circulating that Libra could actually be much bigger than was being acknowledged by the ANP because of new data from test wells and extended well tests in the original play at well 2-ANP-0002A-RJS, located in Block SS-AP1.

The ANP has now confirmed that their most recent 3D seismic data, which was acquired shortly before the 11th round of bidding, (that happened last week), shows that the Libra field is massive, much larger than the largest estimate, and that the main reservoir has a column of 326.4 meters containing light oil rated at 27º API. These latest figures peg Libra as containing a whopping 26 to 42 billion barrels boe, of which the ANP expects 30% to be recoverable, this leaves the recoverable oil figures at 8 to 15 billion barrels boe.

At this point Brazil has around 15 billion barrels boe of proven reserves and another 15 billion expected reserves, when counting all the pre-salt and post-salt. With the new number for Libra, the final figure will possibly triple. Libra is located northeast of the Lula field in an area of around 1,500 square km, (which is about 1% of the total pre-salt area in southeast Brazil). The Libra field is around 180km from the coast of Rio.

This really shakes up the O&G market, not only in Brazil, but the World market itself and the ANP has already confirmed that the Libra field will be in the next round of pre-salt bidding and has actually anticipated the bidding round to October 2013 in place of the natural gas bidding round that will now be in November. That shows the magnitude of this reservoir and there is no doubt that there will be a vicious dispute by operators to acquire it, even with Petrobras being the operator with a minimum of 30% shares. This is also a deepwater play, with the main well at over 1,900 meters. This also highlights the fact that there is no estimate for the total potential for reserves within the known pre-salt area. There is also the fact that the whole pre-salt are along the Brazilian coast is unknown, even the extent of the Santos Basin itself is unknown and that there is still a good possibility to uncover pre-salt reservoirs along Brazil’s northeast and north coasts.

Petrobras has set plans to spend $5.6 billion through 2016 to increase output at the Campos Basin mature fields which have had decreased outputs for some time. Most post salt fields at the Campos Basin have been in production since the 1980s, some of which have been major producers. A steep decline in production began around 2009, not only due to the aging fields having low reserves but also because of lack of investments in operational resources and equipment for the older fields. The national operator will invest $1 billion in new money and spend $4.6 billion in operating costs to boost efficiency in the offshore Campos Basin operating unit to historic levels of about 90%, up from 72% in the first quarter of 2012. The program will update old equipment and use new technologies in order to improve recovery from the old wells. Another important aspect of this effort will be in substituting aging rigs and production systems with more modern equipment, something that has been demanded by the local offshore workers unions for some time and which has already lead to countless strikes and even some serious accidents. "We are going to return to levels of efficiency more adequate for a mature basin," said Joelson Falcao, general manager for Petrobras's Campos Basin operating unit. The Campos Basin includes 31 offshore platforms, or production systems, operating off the coast of Rio de Janeiro and São Paulo, including several of Brazil´s oldest offshore rigs. Some of the technologies used to increase this output may be related to re-injection of water or CO² in order to boost the output, other possibilities include the use of subsea systems instead of some traditional surface production systems in some wells. Subsea separation technology may also be in the cards in order to maximize recovery. The Campos Basin is responsible for about 1/4 of the Petrobras's nearly 2 million barrels of daily crude production.

The group that will be awarded the construction contract for this novel offshore LNG production unit will be known by October 31 Petrobras is keen to begin construction of the unit as it considers offshore natural gas liquefaction vital to guarantee a efficient output for the Santos Basin pre-salt gas.

Many of the Santos Basin pre-salt fields are located over 300km from the coast, which convinced Petrobras to seek other options in order to deliver the gas to the market. Normally gas is transferred from wells to the coast through underwater pipelines but with such distances involved and with many of thereservoirs located in deep water, the national operator opted to develop this option where the ship will be moored in deepwater adjacent to some wells from which it will receive the gas, and acting as a floating refinery the ship will liquefy the gas offshore and transfer the liquefied gas to LNG carriers offshore. These carriers will the head for the coast of directly to other countries to export the pre-salt gas. It is most likely that the majority of this offshore production will target the export market as the simple fact that the carriers are loaded offshore decreases the cost of the export operation as the ships will not need to pay high taxes in Brazilian ports.

Three consortiums are participating in this tender through their technical proposals, these are:

Technip/Modec/JGC, another is composed of SBM and Chiyoda and finally there is the Saipem project.  

Petrobras´s partners in this venture are BG, Repsol and Galp, which are also partners to the national operator in various Santos Basin pre-salt fields. The Project is expected to be completed after 2015. There is only one other such project being developed in the world and that is being done by Shell and partners for the massive Australian gas fields.

 

Claudio Paschoa

 

Since 2007, Petrobras, along with national research institutes and industry suppliers, has been busy researching physical, chemical, geological, biological and socio-economic characteristics of the Campos Basin, a region that starts at the north end of the State of Rio de Janeiro all the way to the south of the State of Espirito Santo, encompassing an area of some 100 thousand square kilometers.

The project has two main parts, one about fisheries and its socio-economic impact and the other about environmental issues, which is called the Habitat Project. The information is being transformed into a database, which will be used to support decision making concerning environmental issues, environmental management and will also be edited as a scientific publication.

The Campos Basin Regional Environmental Characterization Project came from a demand by the Brazilian Environmental Institute (Ibama) and the database and publications are scheduled to be available to all interested parties by 2012.

It is a little strange that a project like this has not been undertaken sooner since the Campos Basin has seen O&G exploration since the 80´s and it is hoped that the same program will be swiftly extended to the Santos and Espirito Santo Bacins. Important discoveries related to deepwater fishes have already been made and the project is truly leading to a better understanding of the different environments that make up the Campos Basin.

All together 250 researchers, technicians, professors and students are involved in the project, which along with contributing to the quality of information on the Campos Basin environment, also helps in making data easier to find for technical projects for both Ibama and Petrobras, scientific institutions and other government or non-government organizations.

All the data was collected between the coast and the seabed up to 3,000 meters, making it possible to have a very thorough characterization of the Campos Basin.

 

Claudio Paschoa

It took a while to happen, but Petrobras and Chinese oil and petrochemical companies finally reached partnership agreements. Considering the scope of the Brazilian pre-salt and the expected growth of the Brazilian O&G market, these partnerships may become vital, as much more investments will be needed along the next 10 years.

These partnerships in research and O&G exploration and production have been in negotiations for a long time but it took an official Brazilian delegation, headed by Brazilian President Dilma Rouseff, going to China, in order make it happen. It was a certainty in the market that this partnership would eventually come to be, it was just a matter of when it would happen and what it would encompass.

With Sinopec, Petrobras struck a Technological Cooperation Agreement (TCA), in order to exchange knowledge in areas such as geophysics, geology, and reservoir engineering.

Petrobras also signed a Memorandum of Understanding (MOU) with Sinochem, China´s leading pretochemical conglomerate, aiming at strategic cooperation in order to identify and make business opportunities viable in E&P areas, oil and gas commerce and mature field recuperation.

Petrobras and Sinopec have manifested their desire to look for mutually beneficial business opportunities in various areas, including subsea technology and deepwater subsea systems manufacture, therefore increasing the commercial relations already in gear between the two companies.

China has been making significant investments in subsea technology and the development of the Brazilian and West African deepwater pre-salt is considered of strategic importance by the Chinese government. Sinochem is already uncorking new oil in Brazil, through its partnership with Statoil.

This is happening at the Statoil operated Peregrino field in the Campos Basin, where Sinochem holds a 40% stake. The field is located 85km off the coast of Rio de Janeiro at a depth of 120 meters.

A new exploration well was just drilled at the Peregrino South reservoir, just a few kilometers from the already producing, main Peregrino field. This new sandstone oil accumulation was found within the famous Carapebus geological formation, which also contains other important Campos Basin reservoirs. It is still too early to define the size of the new discovery, as Statoil is still to drill an additional appraisal well in Peregrino South.

The importance of new discoveries in the Campos Basin must be emphasized, for a long time this Basin was thought to be mostly over-explored and only contain mature fields. These new Statoil discoveries, along with the discovery of a new O&G province in the South Campos Basin by OGX, and other new discoveries, basically eliminates any notion that the Campos Basin has little left to give. Last year Petrobras even discovered new pre-salt reservoirs under existing post-salt wells in the Campos Basin, which was something very few would have expected.

 

Claudio Paschoa

Above: Petrobras CEO José Sergio Gabrielli de Azevedo, and Sinopec CEO Fu Chengyu signed a Technology Cooperation Agreement at company's headquers in Beijing

 

 

Above: Petrobras E&P Director, Guilherme Estrella, during the Memorandum of Understanding signing cerimony for the Strategic Cooperation with Sinochem in Beijing, China

It was recently announced that all of OGX´s geophysical and geological software applications will be moved to Landmark´s DecisionSpace Desktop, which is a Halliburton owned company.

"The integration of workflows and data such as rock, logs and seismic across domains in the DecisionSpace Desktop allows us to work more efficiently as we explore for hydrocarbons, improve our asset knowledge, and reduce our exploration risk.", said Marcos Amaral, OGX´s Executive Manager for New Technologies. 

"DecisionSpace Desktop's unique approach to reservoir description, known as Dynamic GeoModeling, is a no compromise, unified and dynamically updated interpretation and modeling system," said Gene Minnich, vice president of Landmark Software and Services. "Using proven science, unparalleled data management and easy to use interfaces, this software is helping our clients make better decisions faster."

The DecisionSpace Desktop workspace unifies workspaces for geosciences applications related to oil and gas E&P. The software is built on the most widely-adopted data management system in the industry: OpenWorks® software. The software makes it possible to access data across entire exploration areas, from a reservoir to the entire basin, along with managing and sharing one copy among many users and update the models with new data in real time.

This will undoubtedly be a handy software bundle for OGX, as they have basically uncovered a new shallow water oil province in the southern part of the Campos basin, composed of various reservoirs. If we look at the scope of what this software bundle offers, it will simplify the management of the reservoirs as a group, even though each reservoir has its own distinct characteristics.

According to Halliburton, the DecisionSpace Desktop workspace provides a common, flexible 1D, 2D, 3D workspace for the whole OGX exploration team, including seismic, logs, maps, sections and cubes. With the software, OGX exploration engineers and geologists will be capable of building and sharing workflows using the Project Designer.

The DecisionSpace software bundle is composed of:

-Base Software - Seamless integration and painless collaboration.

-Earth Modeling Software - Reservoir modeling software which enables geoscientists and reservoir engineers to construct accurate, high resolution, geocellular models.

-Geology Software - Provides geological interpretation, mapping and modeling for asset teams.

-Geophysicas/Seismic Interpretation Software - Provides seismic interpretation, mapping and modeling for asset teams.

-GIS software - Provides GIS data to image cultural data, set the geospatial context for interpretation, map play fairways, plan optimal well locations, and assess environmental impact.

-Stimulation software for fracture monitoring - Fracture monitoring, where engineers and geoscientists can visualize and analyze frac operations and microseismic data in real time.

-Well Planning Software - Well and field development planning team can integrate all relevant data from all domains in one unified 3D workspace.

 

Claudio Paschoa

 

 

 

Tests on a number of recently discovered adjacent wells, along with the first production well at Waimea Horizontal, support OXS´s claim that a new shallow water O&G province has been discovered at Block BM-C-41 in the southern Campos Basin.

It is very significant when an acclaimed Geologist such as Paulo Mendonça, General Manager (Director) of OGX, comments that “This is one of the best production tests I have ever seen in my life”. Mr. Mendonça worked for decades in Petrobras and actively participated in ALL the major hydrocarbon reservoir discoveries made by Petrobras in Brazil, including the early Campos Basin boom, along with spearheading discoveries at the Espirito Santo and Santos Basins. That´s just to name the most known Basins he helped discover and develop, because there are quite a few more Basins involved.

There is no real need at this point to go into final recoverable oil figures, as that would be hard to ascertain at this point but if the total potential is anywhere along the 3.6 bboe, originally predicted, they that would be awesome. It may swing for more or less than that in the end, but it´s still a major achievement. Shallow water drilling is way cheaper than deep water drilling to begin with and the plays are basically all within a hundred km from the coast, which simplifies logistic tremendously. In term of safety, shallow water drilling normally is less complex and demanding than deep water efforts but there definitely are risks, as there always will be when drilling for oil. At least shallow water drilling is something more easily understood after so many years of E&P.

The good side is that OGX is a new O&G player with different values than the old players and also a supposedly, very safety and environmentally conscious operation.  Then again, all O&G players claim to be very safety and environmentally conscious operations. In the end only time will tell.

Tests on a number of recently discovered adjacent wells, along with the first production well at Waimea Horizontal, support OXS´s claim that a new shallow water O&G province has been discovered at Block BM-C-41 in the southern Campos Basin.

It is very significant when an acclaimed Geologist such as Paulo Mendonça, General Manager (Director) of OGX, comments that “This is one of the best production tests I have ever seen in my life”. Mr. Mendonça worked for decades in Petrobras and actively participated in ALL the major hydrocarbon reservoir discoveries made by Petrobras in Brazil, including the early Campos Basin boom, along with spearheading discoveries at the Espirito Santo and Santos Basins. That´s just to name the most known Basins in Brazil that he helped uncork and develop, because there are quite a few more Basins involved.

There is no real need at this point to go into final recoverable oil figures, as that would be hard to ascertain at this point but if the total potential is anywhere along the 3.6 bboe, originally predicted, they that would be awesome. It may swing for more or less than that in the end, but it´s still a major achievement. Shallow water drilling is way cheaper than deep water drilling to begin with and the plays are basically all within a hundred km from the coast, which simplifies logistic tremendously. In term of safety, shallow water drilling normally is less complex and demanding than deep water efforts but there definitely are risks, as there always will be when drilling for oil. At least shallow water drilling is something more easily understood after so many years of E&P.

The good side is that OGX is a new O&G player with different values than the old players and also a supposedly, very safety and environmentally conscious operation.  Then again, all O&G players claim to be very safety and environmentally conscious operations. In the end only time will tell.

  

Claudio Paschoa

 

Part of the OGX Release concerning Waimea and the New O&G Province:

OGX concluded the drilling of the horizontal well 9-OGX-26HP-RJS (Waimea Horizontal) and, through a drill-stem test (DST), has identified excellent production index (PI) of 100m³/day/kgf/cm², similar to results obtained in the best wells in the country. Currently, the well is being equipped to perform an extended well test (EWT) which is expected to register oil flowrate of up to 20,000 barrels per day, and a higher flow rate during its definitive development phase. This result surpassed initial expectations related to the Waimea accumulation and provides a solid foundation for the initiation of OGX’s production phase. This well is located in the BM-C-41 block in the Campos basin and will be connected to the FPSO (Floating Production Storage & Offloading) OSX-1 during the EWT, which will begin in the middle of 2011.

“The result obtained in the drilling of this well represents a milestone in the Company’s history. The use of horizontal drilling technology in the well confirmed very high production indexes in the carbonate reservoirs in the southern Campos basin, proving that we do have, in fact, before us an extraordinary petrolific province,” commented Paulo Mendonça, General Director of OGX. “This is one of the best production tests I have ever seen in my life”, added Mr. Mendonça.

The drilling of the horizontal well 9-OGX-26HP-RJS utilized state-of-the-art technology. OGX’s technical team was responsible for implementing an approach which called for the drilling of a directional well to a depth of 3,746 meters in order to enable a horizontal entrance into the targeted reservoir. The successful execution of this approach resulted in a well with more than 1,000 meters of horizontal extension in the carbonate reservoirs of the Albian section of the Waimea accumulation, which was originally discovered through the drilling of the 1-OGX-3-RJS well on December 18, 2009.
Following the conclusion of the drilling process, a drill-stem test was performed, which confirmed production potential of 40,000 barrels per day of oil with gravity of approximately 20°API. A complex process of selective acidification was used in eight well intervals, permitting better stimulation of the more than 1,000 meters of the well’s extension, thereby maximizing the oil flow.
In addition to the results, further information was collected, such as features of the reservoir rock and of the fluids, which will be analyzed by OGX’s technical team in the coming months. These interpretations, along with the information from the EWT will permit a better understanding of the accumulation and will assist in the preparation of the development plan.

 

 

Even as Petrobras allegedly slows its exploration efforts, new discoveries are still being uncorked in the Santos Basin. While the national player announced the start up of the EWT in the Guará area in late December, yesterday a new deepwater pre-salt light oil accumulation is discovered in an adjacent area at the same BM-S-9 exploratory block.

The Guara  EWT is producing through well SPS-55, and  is expected to last for five months with a daily production is estimated at 14,000 barrels of oil per day. The Guará area is located in block BM-S-9 and around 300 kilometers off the coast of São Paulo state. The recoverable O&G volumes in Guará are estimated at between 1.1 and 2 billion boe with a around 30º API. Following this EWT, a pilot project is planned for the area, with the wells being connected to the FPSO Cidade de São Paulo. The production is expect to start by 2013 and is estimated at 120,000 barrels of oil and five million cubic meters of gas per day.

Today Petrobras announced a new discovery of good quality oil in another of the pre-salt reservoirs present in block BM-S-9, in ultra deep waters of Santos Basin. The discovery was a result of the drilling of well 3-BRSA-861-SPS (3-SPS-74), informally known as Carioca Nordeste (Northeast), located in a water depth of 2,151m and 275km off the coast of the state of São Paulo in the evaluation area of Carioca well 1-BRSA-491-SPS (1-SPS-50). Preliminary analyses confirm the extent of the accumulation with oil of 26º API in a net pay of 250 meters, actually superior to the result of the wildcat well.

The BM-S-9 block has two evaluation areas: well 1-BRSA-594-SPS (1-SPS-55), informally known as Guará and the area of well 1-BRSA-491-SPS (1-SPS-50), informally known as Carioca, where the new discovery well is located. Petrobras holds a 45% stake in this concession, and is the operator of the consortium comprised of BG Group with 30% and Repsol with 25%.

The Guará EWT will allow Petrobras and its partners to develop a deeper knowledge of the area and the behavior of the reservoirs, in turn aiding the creation of a definitive project for the region and contributing to the development of the Santos Basin pre-salt layer. With the Tupi  area already beginning to produce commercially and the huge Libra area undergoing  further drilling, new pre-salt discoveries can definitely be expected for 2011, and the rumor is that there are major new deepwater reservoirs still to be uncovered, which in turn certainly signifies more business for subsea equipment manufacturers and service providers looking for business in Brazil.

Claudio Paschoa