Turnaround as Brazil's Petrobras sees a rise in production
The state oil company has seen more projects develop to increase the country's oil output
Brazil's state oil company Petrobras has increased oil output to record levels in consecutive months this year as new deep-water projects come on stream, signalling a potential turnaround after repeated delays and missed production targets. The company's total oil output was 2.239 million barrels a day (b/d) in September, up 16% on the 1.932m b/d it produced a year ago. The International Energy Agency (IEA) has described the sharp increase in production from Brazil in recent months as 'remarkable'.
New production vessels launched earlier this year are paying off in terms of rising output. Petrobras said production rose in September partly because of stronger contributions from the P-55 and P-62 platforms in the Roncador field in the Campos basin, and the Cidade de Paraty floating production unit at the Lula Nordeste pre-salt field in the Santos basin. The three production vessels are ramping up production after being brought into operation earlier this year. The Cidade de Paraty is now producing at its full 120,000 b/d capacity. Pre-salt production was 532,000 b/d in September, and hit a record 618,000 b/d on 18 September, Petrobras says.
Production is likely to further increase in the coming months. Petrobras and its partners said on 14 October that they had started output at the pre-salt area of the Iracema Sul field in the Santos basin, via the Cidade de Mangaratiba floating production storage and offloading (FPSO) vessel. Petrobras said the first well brought on stream tat the field has the potential to produce 30,000 b/d of oil.
The Cidade de Mangaratiba has a total capacity of 150,000 b/d, though the partners have not said how long it will take to achieve this. The Iracema Sul project is operated by Petrobras with a 65% interest and is working alongside the UK's BG Group, which owns a 25% stake in the field, and Portugal's Petrogas, which has a 10% stake.
Petrobras also said that it is on track to bring two more new platforms into production this year. The 120,000 b/d Cidade de Ilhabela FPSO will be sailed to the northern section of the pre-salt Sapinho field in the coming months.
Petrobras operates the field with a 45% stake. UK-based BG Group has a 30% stake in the field, with Repsol Sinopec holding the remaining 25%. The P-61 platform at the Papa Terra field ,in the Campos basin, will start production once the tender-assisted drilling support rig at the field is ready to go, Petrobras says.
Aside from Petrobras, BG Group has brought four FPSOs on stream across the BM-S-9 and BM-S-11 blocks and has a net production capacity of 82,500 b/d of oil in the country. "This fast-paced development in the Santos basin reflects the quality of the reservoir and our ongoing close working relationship with Petrobras," BG Group's chief operating officer Sami Iskander said in a statement.
Next year could see output growth slow as only one new production system, an FPSO at the Iracema North field, is scheduled to come into production. But that is before a major expansion push from 2016 through to 2018 when 24 new projects are planned. Petrobras plans to increase oil output, adding around 1m b/d of new production between now and 2018, with a further 1m b/d scheduled on stream from 2018 to 2020, bringing production to 4.2m b/d.
The plans, though, are threatened by slow demand growth and falling oil prices. Some of Brazil's most expensive projects could be threatened if Brent crude prices fall below $80 a barrel (/b), but the vast majority of these new projects are thought to be profitable even if prices were to fall below $60/b.
According to the International Energy Agency, Brazil's deep-water fields are typically cheaper to bring on stream than shale oil in the US, Canadian oil sands and West Africa's deep-water provinces.