Foreign Oil Majors Drilling in Brazil Despite Oil Prices


Brazilian Basins
(Click to Enlarge)

RIO DE JANEIRO (Dow Jones Newswires), May 5, 2009

Foreign oil companies continue prospecting for crude at Brazilian concessions, including the key BM-S-22 block in the Santos Basin, despite a steep decline in oil prices and daunting costs.

A series of high-profile oil discoveries in the past few years has made Brazil one of the world's most exciting oil frontiers. Last week, state-run energy giant Petroleo Brasileiro SA (PBR), or Petrobras, pumped the first crude from a Santos Basin sub-salt well at the Tupi field.

BM-S-22 is part of a cluster of promising Santos Basin blocks that have yielded several oil discoveries, including the nearby BM-S-11 block's Tupi - the Western Hemisphere's largest oil discovery in 30 years.

But development of the blocks is pricey and complicated. The oil fields are located under 2,000 meters of water and a further 5,000 meters below sand, rocks and a shifting layer of salt.

Nonetheless, drilling continues.

The Brazilian unit of global oil heavyweight ExxonMobil Corp. (XOM) maintained work on a second well at BM-S-22, according to drilling data from Brazil's National Petroleum Agency, or ANP. The 1ESSO3SPS test well, called Azulao, twice tested positive for oil earlier this year.

ExxonMobil's 3ESSO4SPS well, dubbed Guarani, is being drilled by the West Polaris rig. The well is targeting a total depth of 5,404 meters, ANP data showed.

ExxonMobil holds a 40% operating stake in the block. Hess Corp. (HES) also has a 40% share, while Petrobras holds the remaining 20% stake.

Also in the Santos Basin, the local unit of BG Group PLC (BG.LN) completed drilling on one test well in the S-M-508 block and started work on another. BG completed drilling on the 1BG5SPS test well, drilled by the GSF Celtic Sea rig. The well was drilled in 818.3 meters of water to a total depth of 4,650 meters.

Work on a second well, 6BG6PSPS, started Monday, according to the ANP data. The GSF Celtic Sea was drilling the well in 818.3 meters of water, targeting a total depth of 5,715 meters.

BG is lead operator of the block with 40%, while Petrobras holds a 60% stake.

Meanwhile, U.S. major Chevron Corp. (CVX) ramped up efforts to bring its Frade field in the Campos Basin onstream later this year. Drilling on two wells was under way at the field, while a third well was completed, the drilling data showed.

Drilling at Frade was being done via the Noble Leo Segerius rig. Work was completed on the 7FR8HPRJS well, which was drilled in 1,166 meters of water to a total depth of 3,286 meters.

The rig was currently drilling two additional wells at the site as of Monday, the drilling data showed. The 8FR5DRJS well was under way in 1,301 meters of water, targeting a total depth of 2,778 meters. In addition, the 9FR3DRJS prospect was being drilled in 1,183 meters of water to a total depth of 3,466 meters.

Chevron expects the $3 billion Frade field to start production later this year, producing about 270 million barrels over the next 18 years.  

Copyright (c) 2009 Dow Jones & Company, Inc.

Related Companies
 Company: Exxon Mobil Corporationmore info


 - Nigeria To Mediate In Dispute Between Exxon And Labor Unions (May 24)
 - Shell Shareholders Reject Emissions Target Proposal (May 23)
 - ExxonMobil, Total Discuss Offshore Drilling Opportunities In Greece (May 19)
 Company: Petrobrasmore info


 - Petrobras Sees Room For More Efficient Payroll, CAPEX (May 12)
 - Petrobras Eyes Adding Texas, African Assets to Asset Sale Plan (May 10)
 - Exxon, Petrobras Said to Hold Talks on Wide-Ranging Partnership (May 9)
 Company: BG Groupmore info
 - Despite Cuts, Big Oil to Expand Production into the 2020s (Sep 5)
 - Sound Energy Appoints Ex-BG Exploration Lead (Aug 24)
 - Shell Misses Expectations As Earnings Plunge On Oil, BG Costs (Jul 28)
 Company: Chevron Corporationmore info
 - No New Demand, More Supply Leaves Spot Price Languishing (May 26)
 - South Africa Wants Sinopec to Retain Refinery Capacity (May 25)
 - Venezuela Oil Executive Arrested in Corruption Probe (May 23)
 Company: Hess Corporationmore info


 - Hess Reports Smaller Loss As Oil Prices Rise, Costs Fall (Apr 26)
 - Gulf Of Mexico Lease Sale Nets $315M in Bids, Feds Suggest Trump Bounce (Mar 22)
 - Oil, Gas Firms Make Global 100 Most Sustainable Corporations List (Jan 19)
 Company: Transocean Ltd.more info


 - Transocean Notes Management Changes (Dec 3)
 - Transocean Has A Third Of Deepwater Rigs Seeking 2014 Work (Nov 21)
 - Transocean's Alaska Rig Contract with Shell Starts July 2014 (Nov 19)
 Company: Noble Corporationmore info


 - Diamond Profit Beats Estimates, but Rig Delays Weigh on Shares (Oct 24)
 - Colorado Residents and Oil, Gas Industry Continue Open Dialogue Efforts (Oct 4)
 - Noble Corp to Spin Off Older Drilling Rigs into New Company (Sep 25)
 Company: Seadrill Ltdmore info
 - Seadrill in a Free Fall Is Fodder for Day Traders as Hope Fades (Apr 5)
 - Seadrill Drops to Record Low After Warning on Shareholder Losses (Apr 4)
 - Billionaire Fredriksen Buys Rig, Ends Hyundai Dispute (Mar 13)
For More Information on the Offshore Rig Fleet:
RigLogix can provide the information that you need about the offshore rig fleet, whether you need utilization and industry trends or detailed reports on future rig contracts. Subscribing to RigLogix will allow you to access dozens of prebuilt reports and build your own custom reports using hundreds of available data columns. For more information about a RigLogix subscription, visit www.riglogix.com.
Events  SUBSCRIBE TO OUR NEWSLETTER

Our Privacy Pledge
SUBSCRIBE


Most Popular Articles


From the Career Center
Jobs that may interest you
Equipment Operator - San Antonio
Expertise: Coil Tubing|Driller|Production Operator
Location: San Antonio, TX
 
Frac Supervisor - TX, ND, WY & OK
Expertise: WellSite Supervisor
Location: El Reno, 
 
United States Bossier City: Service Supervisor I - Frac/Acid
Expertise: Field Service Tech|WellSite Supervisor
Location: Bossier City, LA
 
search for more jobs

Brent Crude Oil : $51.46/BBL 4.63%
Light Crude Oil : $48.9/BBL 4.78%
Natural Gas : $3.18/MMBtu 0.90%
Updated in last 24 hours