Deep thinking on the Latin beat

August 1, 2011

The focus on Latin American deepwater activity naturally gravitates to the headline-grabbing pre-salt region offshore Brazil. But other areas in Latin American deep waters are worth noting, as Jennifer Pallanich explains.

Petrobras' discovery of the huge Tupi (now Lula) field offshore Brazil propelled the pre-salt field, the company and the country into the international spotlight. Since then, Petrobras has racked up about two dozen more pre-salt finds (OE last month).

‘We are not just a pre-salt company,' says Carlos Tadeu Fraga, executive manager of Cenpes, the Rio-based R&D arm of Petrobras. First and foremost, he says, Petrobras is an energy company, and petroleum will remain important. However, the Brazilian company does want to provide value in areas beyond oil & gas, such as biofuels. ‘Mother Nature does that for us, but it takes a long time . . . we have to wait millions of years,' Fraga says, noting Petrobras aims to shorten the time it takes by turning other biomass into biofuels and supporting wind and solar energy.

The three pillars in Petrobras' innovation strategy are extending the existing limits of the company's oil & gas business, extending the mix of the company's products beyond oil & gas, and focusing on sustainability. When it comes to sustainability,reduced water consumption tops the list. Petrobras aims to work more in a closed loop so it reduces the release of effluents and increases the overall efficiency of energy, Fraga says.

Petrobras, which has been working in the deepwater arena since the early 1980s, has a number of deepwater projects – pre-salt and not – going on at any given time. As such, Fraga says he likes to highlight one of the projects the company is working on that features a new solution, in this case, subsea processing.

‘Anything that may help us to reduce the necessary area in a floating facility is crucial for us,' he says. Petrobras is moving more and more operations below the water line.

One of the more interesting projects Petrobras has under way is the planned installation of the first deepwater oil/gas/ water/sand separator on the seabed. FMC Technologies is supplying the separator, dubbed Marlim Prototype or SSAO (Sistema de Separação Submarina Água-óleo), which is destined for the P-35 FPSO on the Petrobras-operated Marlim field in 2300ft water depth in the Campos Basin. Petrobras aims to debottleneck the facility and reinject the water with the new separator, expected to be installed late this year.

The separator will weigh in at a hefty 400t and feature a 22m pipe separator. The new equipment features 11 individual separators that are intended to reduce the water cut to under 100ppm and sand levels to under 10ppm.

Elsewhere in Brazil's deepwater, Chevron is adding development and injection wells at its Frade field, which has been in production since June 2009. Chevron operates the field in 3700ft of water with 51.7% interest on behalf of partners Petrobras (30%) and Frade Japão Petróleo (18.3%). At the end of 2010, Chevron had eight development and four injection wells drilled and completed; by the end of 2011, Chevron intends to have five additional development wells and three more injection wells drilled and completed at the Campos Basin field.

Chevron is also involved in the Papa Terra field, operated by Petrobras. That field, in 3900ft of water in the Campos Basin, calls for a TLP and an FPSO (OE April 2010). Sanctioned in early 2010, development drilling is expected this year with production of 14°-17°API oil beginning in 2013. Petrobras operates with 62.5% interest on behalf of Chevron, with the remaining interest.

Shell also has work going on offshore Brazil (OE March 2008, September 2010). In October 2010, the Anglo-Dutch supermajor sanctioned phase two of its BC-10 project, also known as Parque das Conchas, or Shell Park. This Campos Basin field in 5900ft of water, first began production in July 2009 from nine wells in the Abalone, Ostra and Argonauta B-West fields to the Espirito Santo FPSO, which has a processing capacity of 100,000b/d and 50mmcf/d. The fields produce oil ranging from 16° to 42°API.

Phase two calls for seven additional development wells. During this phase, Argonauta O-North is expected to begin producing by 2013. A later phase could see the Nautilus field begin production as well as a third Argonauta reservoir. Shell operates BC-10 with 50% interest on behalf of partners Petrobras (35%) and ONGC (15%).

Mexico matters

Pemex continues to find its deepwater legs. Earlier this year, the Mexican NOC found gas at its Piklis prospect in 6325ft of water (OE last month). The Piklis-1 well was Pemex' deepest in two ways: water depth and total depth of 17,818ft. Pemex said tests of the Lower Miocene target indicated about 400bcf to 600bcf of non-associated gas and condensates. If Pemex determines the find is commercial, the discovery could be tied back to production infrastructure at the nearby Lakach gas field. The Centenario semi, owned by Gremsa, drilled Piklis-1 and is under contract to Pemex for five years.

The Lakach field is said to hold 1.5tcf of total reserves, and Pemex expects to invest 17.2 billion pesos ($1.52 billion) to develop the project from 2011-15. Plans call for a subsea tieback in 3280ft water depth via dual flowlines to a new onshore gas plant. Technip won the pre-FEED contract for the project.

Elsewhere in Mexico's deep waters, CGGVeritas has carried out a 3D seismic program. The Han Sur-Oeste de Tamil shoot covered 12,300km2.

Cuban delay

The Scarabeo 9 is slated to arrive this year to begin drilling operations offshore Cuba. The Saipem-owned sixth generation semi, rated for drilling in waters to 12,000ft, will first drill for Repsol YPF once it arrives in Cuban waters (OE December 2010).

Falklands focus

The squabble over whether Argentina or the UK has the right to license the Falkland Islands' hydrocarbon resources continues, mutedly. In June 2011, a UN committee recommended that Argentina and the UK resume talks as soon as possible over the potential decolonization of the Falklands.

In the foreground, Falkland Oil & Gas (FOGL) and Borders & Southern Petroleum have signed on to have a deepwater rig arrive in the Falklands to carry out drilling operations starting in late December 2011.

Ocean Rig's fifth generation semi Leiv Eiriksson – currently working for Cairn Energy offshore Greenland – is rated to drill in waters to around 10,000ft.

Technically, the Leiv Eiriksson won't be the first rig to spud a deepwater well off the Falklands. In 1H 2010 the Ocean Guardian spudded the Toroa well in 1970ft of water. FOGL rated that well as a failure despite saying the mid- Cretaceous section had very good quality sands.

Leiv Eiriksson will first drill two wells for Borders & Southern, at Darwin and Stebbing, both in waters of 4900ft to 6600ft. Borders anticipates each well will take about 45 days to drill. Following that program, FOGL expects to drill two wells. The first will be the Loligo prospect, with the second well depending on the outcome of the first well, but expected to be an appraisal at Loligo, or exploration of the Nimrod, Vinson or Inflexible prospects.

BHP Billiton, which joined up with FOGL in its Falkland Islands exploration efforts in 2007, has decided to exit the region.

Uruguay on offer

Uruguay was at the end stages of its Uruguay 2009 bid round the last time OE carried out a country-by-country review of deepwater activity in Latin America. The country had qualified six companies to bid in the 2009 round, which offered 11 blocks in water depths ranging from shallow to ultra-deep.

Ultimately, blocks 3 and 4 from that round were awarded. YPF with 40% is operating block 3, which has waters of 656-4920ft, on behalf of Petrobras (40%) and Galp (20%). Petrobras is operating the shallow water block 4 with 40% on behalf of YPF (40%) and Galp (20%).

Uruguay's ANCAP said it had four goals for the 2009 round: to put Uruguay on the world oil & gas map, to get IOCs to consider the country as a destination in their upstream exploration budgets for frontier basins, to qualify for bidding at least one Top 100 oil company of the annual ranking of Energy Intelligence Research, and to receive at least one bid by the bidding deadline. By qualifying three Top 100 oil companies and being able to award two blocks following the closing of the bid round, the agency said it considers the round a success.

As a result, ANCAP is promoting its latest bid round, set to officially launch in September in Montevideo with a road show in Houston the following month. Agency representatives have already traveled around the world talking up the blocks on offer and the terms, which include PSAs (OE March). Uruguay Round II is expected to include 15 offshore blocks covering most of the country's continental shelf. Water depths range from 66ft to 11,500ft.

Trinidad turn

Trinidad & Tobago's Deepwater Competitive Bid Round 2010, launched last September, had 11 blocks on offer in water depths of 5575-6560ft.

Bids were made in February for three blocks. Block 23(a) saw three bids, one each from BP and Niko and one from a consortium of Repsol, BHP and Total.

BHP and Repsol jointly bid on block 23(b), while BP bid for TTDAA14. OE

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