Another find.. Fresh oil and gas find in Brazil: (updateing)

ROCKMAN

DantesPeak, There's even a more basic reason why it took seven years: the drilling technology to explore thses water depths was devleoping 8 to 10 years ago. even today there are only 21 drilling rigs that can operate in water depths over 3000 m. And {etrobras has 80% of those under long term lease.
But you are so right about the cost and time it will take to bring these discoveries on line. Some of the critical technology is still in development. It took 6 years and 92 wells before the first big North Sea Field was discovered. This ain't Star Trek it's complicated , time comsuming and the great majority of exploratory wells fail.

But don't worry about the captal: world banks are standing in line to make the loans. Petrobras has an advantage over most other Big Oils: the Brazil gov't backing of the loan...makes them the safest loans on earth...just like US bonds.

dorlomin · Light Sweet Crude Joined: Aug 05, 2007 Posts: 1062

DantesPeak

ROCKMAN

I'm not sure about Brazil. Maybe them too. But the money lenders learned their lessons. Loans these days require an agreement to use third parties, like the World Bank as arbitrators. If there's a default it's much easier to clamp down on them with such international authority. And besides, Brazil will have the oil to back the loan.

DantesPeak

ROCKMAN

That does jog the memory Dante. I think they were also dealing with terrible inflation at the time too...like 20% per MONTH.

But the world learns. My friend's daughter is a lawyer specializing in international arbitration. She's been explaining how additional safe guards have been designed since those bad old days. For instance, Bolivia has been on an nationalization kick in the oil sector (Venz.'s Chavez has bee "advising" them). But years ago when they signed the contracts they were compelled to agree to let third parties out side of Bolivia have the final authority to settle disputes. I think it Bolivia case it's the World Bank. If Bolivia doesn't comply with the WB's decision the WB can then exert pressure. I.E.: clamp down on Bolivia financials. Of course, Bolivia says this isn't fair now even though it was necessary to get 10's of billions of $'s investment in the country's oil sector.

TheDude

ROCKMAN

Dude, I couldn't remeber if there were lease bonuses or not. Thought the Feds had contributed the leases as it was a "stratigraphic test" meaning no production rights were conveyed with the dilling rights. But the companies may have spent a bundle on offset leases as a gamble.
As I recall (and it is a fuzzy memory) the samples they pulled up indicated that the thermal history/source rock quality offered very little potential for oil generation. In other words, veru unlikelyoil had ever been generated in this interval. Thus it not only condemned the immediate area but the entire geologic basin they were evaluating.

But that's the great thing about tech advances: they might have condemned the interval tested (I can't remember how deep they went but I don't think too far....10,000'??????) but there could be a major oil providence at the same spot but at a depth of 18,000'. Who knows? Modern seismic can tell a lot about structure and some about reservoir existance but it can't tell poop about the oil generation window and source rock maturity.

OilFinder2

LINK

ROCKMAN

bonehead, Actually Brazil isn't completely independent, at the moment anyway. Last month they authorized the construction of two major LNG terminals for import purposes. Don't have the numbers but NG gas been a big source of their consumption. And twice a year during peak consumption periods Rio suffers rolling blackouts due to insufficient NG stock for the power plants.
As to whether they become a major exporter we'll have to see. Their economy certainly needs an energy infusion. I doubt anyone can accurately forecast their growth potential to any great degree. Add the natural uncertainty in forecasting producing rates/timing it's hard to guess the potential scale of exports.

As far as the details: the pre-salt wells are not at all deep by current drilling standards. But the difficult parts are the water depths (2000m+) and figuring out the geology. There are only 21 drilling rigs in the world that can drill in water depths greater than 300m and Petrobras has 80% of those under lease. On the geological interpretaion side I'll be brief: it's a bitch. Kudos to the boys in Brazil for their successes.
I'm a little dubious towards some of the costs and timing numbers being thrown around. (I'll be heading down there in January to work on a Deep Water well). The cost seem a little light. The timing on projects like this can jump 2 or 3 years as a result of relatively minor hitches. I wouldn't take any estimate too serious untill all the wells are drilled and the production facility leaves the shipyard. Even at that point start up would still be a plus or minus 6 month guess.

OilFinder2

Looks like we're gonna have to wait for news on reserve sizes in Carioca/Sugar Loaf. Sad

Oh well, as they say, "Good things come to those who wait." Smile

Petrobras: Carioca Reserve Estimate Unlikely In '08

dorlomin · Light Sweet Crude Joined: Aug 05, 2007 Posts: 1062

ROCKMAN

You have to really admire the Brazian government on so many levels. They have by far the best national oil company in the world. Though the gvo't owns the majority interest in Petrobras the company is run on a pure profit biz model (I've done work for them...they really are very good bix men).

And now they are using their power to exert absout control over their offshore assets. Yesterday the B. gov't announced the formation of a new gov't corporation which will own all offshore mineral rights not current under lease to othe companies/countries.
The new company wil not be involved in drilling or production but will contract those jobs out to Petrobras or any other oil company who wishes to compete. Essentially all revenue from these new opportunities will belong to the people of Brazil.
Unfortunately, if the US gvo't tried this I suspect it would look a lot more like FEMA than Petrobras.

crossthread · Heavy Crude Joined: Jun 20, 2004 Posts: 179

Petrobras (PBR) to Pump First Pre-Salt Oil in September

Brazil's state-run oil firm Petroleo Brasileiro SA (PBR) in September plans to start its first production from a field in the so-called pre-salt area, Marcio Felix Carvalho Bezerra, manager of the company's Espirito Santo state unit, told Dow Jones Newswires Wednesday, last week.

The field, however, lies in Brazil's Espirito Santo Basin, 500 kilometers north of the recent massive oil discoveries in the pre-salt area of the Santos Basin, where the company recently has made giant oil and gas discoveries.

Brazil's promising pre-salt oil play stretches from waters off Espirito Santo state southward via Rio de Janeiro and Sao Paulo states to Santa Catarina state.

"President (Luiz Inacio) Lula (da Silva) in Argentina yesterday said that the field will start output in the first week of September," Carvalho Bezerra said. "We will perform a long-term test with one well, using the P-34 platform that is already pumping from the Jubarte field there." Carvalho Bezerra was speaking to Dow Jones on the sidelines of the World Petroleum Congress that started here Monday and ends Thursday.

Petrobras eyes an initial output of between 10,000 and 20,000 barrels of oil a day from the Espirito Santo pre-salt field.

The company is already pumping about 52,000 barrels a day from the Jubarte field, which lies in higher geological layers - above the pre-salt area.

The pre-salt oil found below Jubarte lies at a water depth of 1,300 meters and a further 3,700 meters below rocks, sand, the Jubarte oil field, and a layer of salt, the executive explained.

While future oil production from the giant Tupi field and from the promising Carioca find - both in the Santos Basin - is expected to be expensive, the output from below Jubarte will likely be cheaper as the existing platform there can by used, he added.

"It will be a long-term test for the pre-salt area," he said. "Its geological formation is similar to the Santos Basin."

Petrobras earlier said the pre-salt field below Jubarte has potential oil reserves of about 570 million barrels, compared to estimated reserves at Tupi of up to 8 billion barrels.

Ferretlover

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