Rio Oil and Gas: Brazil could become top 10 producer

September 16, 2014

Brazil could be poised to become one of the largest oil producers in the world, according to senior executives speaking at this year’s Rio Oil and Gas conference. 

Monday’s Shell luncheon at the event offered an outlook on the changes to the oil and gas industry’s world geopolitics status quo. Shell’s executive vice president Mark Shuster declared that the discovery of major hydrocarbon reservoirs below the salt layer seal, at the deepwater plays in the Santos Basin, could boost Brazil's ranking among international producers.

“Brazil currently has over 40MMboe of remaining liquids reserves and is expected to be one of the world’s top 10 oil producers by 2020, and the top in Latin America - ahead of both Mexico and Venezuela,” Shuster said.

“The discovery of pre-salt is, undoubtedly, a determining factor that has changed the rules of the game… Now, government and the industry need to be aligned so as to ensure a more effective use of this wealth,” he said. This more effective use, Shuster believes, will only be possible if Brazilian industries become more competitive. To that end, he says, changes to local content rules are required. 

“The country has to assess the total capacity that will be needed to develop 40 billion oil barrels in 2030. We have to think how this policy will be managed in order to expand the production in a competitive and responsible manner,” he said. “Changing is never easy, but the ideal thing is to seek an appropriate solution.”

Changes to local content policy, however may not be forthcoming as the Brazilian government and the ANP appear to be confident in Brazilian industry delivering competitive products by maintaining the current local content policy. According to Magda Chambriard: “The orders for production units and drilling rigs are the orders that reinforce the benefits of this (local content) policy.” 

She said these orders were awarded to Brazilian yards knowing that their capacity is growing and the installation of new equipment will help improve productivity. “We’re already building subsea equipment, for example, and we are one step away from exporting it. That means our prices, delivery times and quality are good,” said Chambriard. 

It’s already known that Petrobras will be using the proven and dependable flexible riser systems for projects in Brazil’s pre-salt. Petrobras E&P executives directly related to pre-salt development also signaled that much of the subsea equipment for the huge Libra field will be locally manufactured.

On Tuesday, at the conference, Total’s senior vice president, Americas, Ladislas Paszkiewicz, highlighted the need for a new type of partnership between IOC’s and NOC’s, calling it vital to stimulate a global industry development. Paszkiewicz used the Libra pre-salt field as an example, where Total is one of the partners in the consortium led by Petrobras. Paszkiewicz said the Libra field development may require up to US$80 billion investment. Chinese companies CNPC and CNOOC are also part of the consortium. 

Elsewhere on Tuesday, a lecture centered on the permanent seismic monitoring (PRM) system in use at the Jubarte field in the Espirito Santo basin.  Petrobras implanted the PRM project in 1200-1300m water depth, at Jubarte. Petrobras’ aim is to validate the fiber optic sensing technology in deep water to detect small impedance changes in the reservoir. The first acquisition was concluded in February 2013 and the processing is ongoing by PGS. Passive monitoring of seismic activity of the reservoir will also be acquired during a four-month period before the second acquisition (first monitor) scheduled for December 2014.

Image: IBP

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