JIM REDDEN, Contributing Editor
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| Conclusion of the deck mating procedure for the P-55 semi-submersible platform in July. Petrobras is planning to build 28 new deepwater rigs by 2020 for pre-salt activity. Photo courtesy of Petrobras News Agency. |
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Magda Chambriad, general director of the Brazil Petroleum Agency (ANP), points to the pre-salt clusters of the deepwater Santos, Campos and Espírito Santo basins to explain the terrifically bullish prospects for the nation’s E&P sector. “Brazil today represents 25% of global oil production, and with the new pre-salt province, that number shall increase significantly,” she said in early May during a luncheon address at the 2012 Offshore Technology Conference (OTC) in Houston.
Indeed, with the U.S. State Department and other forecasters putting the estimated recoverable reserves in the pre-salt conservatively at between 30 billion and 80 billion bbl, little wonder why giant Petrobras believes it is on the doorstep to becoming one of the world’s top five oil producers. In its 2020 Strategic Plan, the once wholly state-owned operator said over the next eight years it expects to have doubled its overall proved reserves, with much of the expected increase to come from the pre-salt structures. The pre-salt, many say, could provide the final push to Brazil taking its long-sought role as one of the world’s premier oil superpowers.
Petrobras holds the lion’s share of Brazil’s gargantuan pre-salt reserves and former CEO José Sergio Gabrielli predicted that by 2020, pre-salt will account for 40.5% of the nation’s total oil production. That would represent a quantum leap considering the pre-salt today is only 2% of total Brazilian production. Pre-salt production is expected to climb to 18% by 2015. Today, the pre-salt Santos basin and Campos basin clusters are producing more than 100,000 bpd.
PLANNING AHEAD TO 2015
As part of Petrobras’ 2011-2015 business plan, 19 “large projects” either planned or underway are designed to add 2.3 million bpd to Brazil’s already world-class production. Up to now, Brazil in general and Petrobras in particular have been heavily weighted toward exploration, but as the four-year business plan reveals, the operator is now moving steadily in the development mode. Of the more than 1,000 offshore wellbores Petrobras expects to construct off Brazil between 2011 and 2015, 60% will be development wells.
Petrobras said it will invest more than $4 billion annually on exploration with a cumulative $53.4 billion expected to be spent on pre-salt development when all is said and done. Meanwhile, an aggregate $64.3 billion is expected to ultimately be earmarked for Brazil’s post-salt provinces.
By 2020, 28 newbuild deepwater rigs would join the 39 rigs under contract at the time the 2011-2015 business plan was released. The fleet was doubled between 2007-2012 with the primary focus on units with the capacity to operate in the pre-salt. The rigs join the 123 floating and fixed production units now operating in Brazilian waters with 25 of those installed over the past five years, according to the business plan. During her OTC presentation, Chambriad said the Brazilian government continues to push for tax incentives, primarily aimed to encourage the local building of drilling rigs, vessels and platforms and to improve port infrastructure.
In the meantime, Petrobras says it will sell some $13.6 billion worth of assets between 2011-2015 to help fund its aggressive Brazilian exploration and development program. The operator said the asset sale includes interest in some non pre-salt blocks in Brazil as well as some of its deepwater holdings in the Gulf of Mexico and elsewhere.
Much of the development focus today is on the ultra-deepwater Lula field that encompasses the Iracema and Tupi areas of the Santos basin pre-salt cluster (SBPSC), where unevenly distributed salt layers are up to 2,000 m thick. Petrobras. Last year, the operator continued Lula extended well tests northeast of Iracema from the FPSO Cidade São Vicente with sustained production of 30,000 bpd, according to the 2011-2015 business plan.
In the Campos basin, Petrobras is continuing development of its sweeping Varredura Project, which is designed to boost production from new fields close to existing production facilities. The multi-field development includes the pre-salt Barracuda, Caratinga, Marlim, Marlim Leste, Albacora and Albacora Leste. Reserve volumes for the Marlim Leste and Albacora Leste discoveries have not yet been released, but the remaining four pre-salt discoveries are expected to hold more than 1.1 billion bbl, Petrobras says.
Between 2011 and 2015, Petrobras says it will drill 67 exploratory wells in the current production areas of the Campos basin.
TECHNOLOGY BREAKTHROUGHS
Since its first significant pre-salt discovery in 2007, Petrobras credits a continually fed pipeline of new technologies with steadily decreases in drilling days and associated costs. Early in the pre-salt campaign, Petrobras said wells could take up to 15 months to drill at a cost of $240 million. By early 2011, drilling time had been reduced by 80 days at an average per-well construction cost of $80 million. As part of the long-range strategy, Petrobras aims to keep its discovery costs around $2/boe.
The dramatic reduction in the days vs. depth curve for pre-salt wells and per-barrel costs have been direct results of advanced understanding of how to drill and produce thick salt sections and the introduction of new supporting technologies. Petrobras particularly has been a global leader in the development of subsea pumping and separation systems and by 2015 plans to have a prototype subsea electric transmission and distribution system ready to test.
The ANP’s Chambriad said the government is a solid and aggressive supporter of research and development for the country’s oil and gas sector. “One percent of the gross revenue from fields with extraordinary production go back into R&D. Between 2011 and 2020 we expect to spend up to $8.9 billion in R&D with a great deal of emphasis placed on human resources and infrastructure,” she said.
To help develop optimum strategies for drilling through salt, Petrobras’ Cenpes research complex has leased space to more than a dozen of the leading oilfield service companies to establish R&D facilities for joint projects to seek solutions for specific challenges ranging from formation evaluation of complex carbonate reservoirs to drilling through salt, and production of an oil and gas stream that is often contaminated by highly corrosive CO2 gas.
New Petrobras CEO Maria das Gracas Foster, who assumed the role last February when Gabrielli resigned to enter politics, is expected to continue the aggressive development strategy orchestrated by her predecessor. Foster, a 31-year Petrobras veteran, is a chemical engineer by training and at the time of her appointment was the director of the operator’s gas and energy operations and since 2007 had served as chairwoman of Petrobras Gás S.A. (Gaspetro).
Under its new administration, Petrobras is expected to continue working toward the sustainable development vision espoused in the 2020 Strategy report. The operator has said it fully intends to position itself among the industry’s highest echelon, “placing the company among the world’s five largest oil producers.” 
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