Time Will Tell if Petrobas Well is Brazil's Biggest
RIO DE JANEIRO (Dow Jones Newswires), Nov. 12, 2011
Brazilian regulators gave federal oil company Petroleo Brasileiro more time to explore one of the country's recent deepwater oil discoveries, where one well could prove to be the country's biggest yet.
Petrobras, as the state-run energy giant is also known, said in a statement late Friday a long-term well test at the Carioca Nordeste discovery could potentially produce as much as 28,000 barrels a day. That would make it the country's single-largest producing oil well.
Brazil's National Petroleum Agency, or ANP, also granted Petrobras's request for an extension to its evaluation plan for the broader area known as Carioca, the company said. Carioca is in a cluster of finds in the pre-salt, where oil sits trapped by a layer of salt more than four miles below the seabed. The deadline to declare Carioca commercial was extended until Dec. 31, 2013, Petrobras said.
Carioca Nordeste is currently producing 23,400 barrels of crude a day, with ANP restrictions capping output, Petrobras said. Well tests are often capped by ANP limits on the amount of natural gas that can be flared, or burned off. A well test was also conducted at a nearby field in the same block, called Guara.
Brazil's top producing well in September was at Lula, which was the Western Hemisphere's largest oil discovery in more than 30 years when it was first announced in 2007. The Lula well produced 26,886 barrels of crude oil a day in September, the latest data available from the ANP.
Lula, formerly known as Tupi, was the first of the pre-salt oil fields announced in the Santos Basin off the coast of Rio de Janeiro and Sao Paulo states. Tupi is estimated to hold recoverable reserves of between 5 billion and 8 billion barrels of oil equivalent.
Carioca, Carioca Nordeste and Guara, meanwhile, are in the BM-S-9 block that is estimated to hold recoverable reserves of between 1.1 billion and 2 billion barrels of oil equivalent, or BOE. A pilot production project is expected to start in early 2013, with the installation of a floating production, storage and offloading vessel, or FPSO, capable of producing 120,000 barrels of oil and 5 million cubic meters of natural gas per day.
The company also said that a new discovery, called Abare, confirmed the high-potential of the area. Abare, which showed signs of high-quality light oil, will undergo a formation test, Petrobras said.
As part of the new evaluation plan, Petrobras said that it would drill up to three exploration wells and conduct a long-term well test in the Carioca area. Petrobras has a 45 percent stake and is the operator of the BM-S-9 block, with consortium partners BG Group PLC holding 30 percent and Repsol Sinopec Brasil 25 percent.
Petrobras also announced after markets closed Friday that it made a net profit of net profit of 6.34 billion Brazilian reais ($3.64 billion), down 26 percent from BRL 8.57 billion in the year-ago quarter on a BRL 6.5 billion foreign-exchange loss. The Brazilian real lost nearly 19 percent against the U.S. dollar during the quarter, driving up borrowing costs.
Copyright (c) 2011 Dow Jones & Company, Inc.
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