Petrobras President Upbeat about Future of Company

Petrobras President Upbeat about Future of Company

Petroleo Brasileiro SA’s (Petrobras) president Maria das Gracas Foster highlighted that the company’s oil and gas production will increase from an average 2.2 million barrels of oil equivalent per day (MMboepd) in 2012 to 5.7 MMboepd by 2020 during the “Planning and Management of Offshore Oil Opportunities in Brazil: Petrobras Perspective” panel at OTC Brasil 2013 in Rio de Janeiro.

The company plans to invest $237 billion to transform reserves into production. After 15 years, the National Agency of Petroleum, Natural Gas and Biofuels (ANP) has organized 11 rounds of auctions. Among ANP’s successes was the auction of the Libra pre-salt giant reservoir – part of the plan to double production capacity.

Foster added that besides the Libra challenges, the production reduction and price control efforts of the Organization of the Petroleum Exporting Countries (OPEC) and non-OPEC producing countries should be taken into account when projecting the future of the industry and the country’s position.

“Will Brazil become self sufficient or will Brazil become an exporter? The attitude of neighboring countries, partners and competitors have to be considered as well,” she added, specially due to Brazilian operational rules such as local content (good and services made in Brazil), growing demand and the need to urgently develop infrastructure needed to back up the development of the oil industry.

Petrobras plans to double production capacity by 2020 but also has to take into consideration the appetite for investments of other countries such as China, Korea and Singapore and the lack of availability of skilled human resources in Brazil.

The CEO divided Petrobras’ growth project in three main phases: from 2013 to 2017, when Petrobras’ priority will migrate from exploration to production; from 2014 to 2018, when the challenge will be to add drilling rigs, production units, plus additional demands to the company’s assets and the peak production, that is, to reach 4.2 million barrels per day, 171 million cubic meters per day of gas and double the refining capacity.

Foster said she is very pleased with the success rate of discoveries – 100 percent of the 13 wells drilled in 2013 in the pre-salt area discovered hydrocarbons. Including pre-salt and post-salt, 144 wells were drilled this year with an 82 percent success rate which amounted to the sum of 31.5 billion barrels of oil equivalent (Bboe) including reserves plus potential recoverable oil.

The P-55 unit, which arrived Oct. 12 at the Module 3 area in Roncador field (Campos basin), has an installed capacity of 180,000 barrels of oil per day and 4 million cubic meters of gas per day and can process 48,000 cubic meters per day of water. Treatment, injection and first oil are expected next December.

 The P-55 platform, the largest semisubmersible platform ever built in Brazil, reached 79 percent local content, and is being connected to 42 risers and will be using a 100 MW power generator.

Petrobras currently operates 41 production units and has 28 contracts for building new units, compared to the 62 production units belonging to foreign companies that operate in Brazil. In 2013, shipyards, both in Brazil and abroad are expected to deliver nine units, totaling one million barrels per day of installed capacity.

Petrobras currently expects to produce 5 Bboe in pre-salt, which leads to the building of production units P-77, P-74, P-73 and P-72, all of which are under contract to operate in the Franco, Iara, Florim, Tupi Northeast and South Tupi and Peroba blocks.

The new discoveries in post salt at the Sergipe-Alagoas basin were also showed as significant to the company’s increased production project. As of Oct. 21, 13 out of 16 wells drilled had hydrocarbons, and in the same basin, 38 degree API oil was discovered in commercial feasible quantity during a formation test.

Considering the huge numbers at Libra pre-salt area (8 to 12 billion barrels of recoverable oil) where the government share of profit oil is of 41.65 percent and the company’s will to optimize CAPEX and OPEX, Foster intends to be producing at least 750,000 barrels per day on top of current production by 2017.

Foster estimated reaching peak production by 2023 with the help of associated companies. Besides concessions, ANP rounds opened the way to production sharing agreements, with Petrobras having the right to a 30 percent minimum stake besides being the operator of the pre-salt fields and transfer of rights agreements which already granted Petrobras the right to produce 5 billion barrels, said Foster.

She also estimated a slow-down of tight oil production between 2020 and 2030, after an increased production between 2010 and 2020. Results from a study between Petrobras, Wood Mackenzie and IHS CERA show that between 2013 and 2020, the price of Brent could fall due to an offer that will surpass the demand, but after that, Brent prices would recuperate again.

Foster has been working at Petrobras for 32 years and was the second woman to ever work in an offshore platform in Brazil.



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