Taipan Investor

Petrobras makes major oil and gas field discovery that increases Brazil’s oil reserves by an estimated 50%. The newly discovered Tupi field is one of the largest discoveries of the past decade. Petrobras is developing quite the reputation for its deep water drilling technologies.

Petrobras, with its international recognition and proprietary technology for ultra deep waters, is producing oil at competitive prices in offshore fields at increasingly greater depths, attracting interest from oil companies from the world over with which it is signing cooperation agreements to explore and produce in its reserves in the huge Brazilian submarine platform. Opening the exploration and production area to international partners has generated, in turn, E&P opportunities in other parts of the world, especially where Petrobras’ know how can contribute to business implementation.

Petrobras current objective is to grow production and the oil and gas reserves, in a sustainable manner, and be acknowledged for its excellence in E&P. It also seeks to expand operation areas that have major exploration & production potential and where operating, technical, and technological qualifications represent a competitive differential. Finally, Petrobras also wants to adopt methods and new technologies in sectors where there is a high degree of exploration in order to optimize the recovery factor.

The new Tupi field discovery is equivalent to the world’s most important ones. The new frontier ranges through the Espírito Santo, Campos, and Santos Basins and was explored seven thousand meters below water surface, in the so-called pre-salt rock layer.

To reach the pre-salt layers, at depths ranging from 5,000 to 7,000 meters, the company developed new drilling projects: more than 2,000 meters of salt were crossed. To date, Petrobras is the only operator company, with or without partners, to drill, test and evaluate pre-salt rocks.

According to Petrobras’ Exploration & Production director, Guilherme Estrella, “the area can lead us to a new vision and to new production concepts. It will be an oil and gas producer that will be very far away from the coast, unlike the Campos Basin, which we can have access to through gas and oil pipelines. This is an opportunity for us to create new technologies, to advance with innovations.”

A few of these innovations are unprecedented at Petrobras, such as opening caves in the salt to serve as gas reservoirs, until the pilot project goes online. Another innovation that is being studied is generating power in the area itself, which would be taken to the mainland via power cables.

The possibility of having a floating thermal power plant or to use gas liquefaction vessels - to take the product to the Rio de Janeiro and Pacém (Ceará) terminals, from where the product would be injected into the network that supplies the thermoelectric plants.

The volume that was discovered in the Tupi accumulation alone, but a small part of the new frontier, may boost the current Brazilian oil & gas reserves by more than 50%, currently at 14 billion barrels.

With investments in the order of $1 billion, 15 wells were drilled in the past couple years that reached the pre-salt layers, eight of which duly tested and evaluated with the best oil industry techniques. These wells produce high commercial value light oil and a large amount of associated natural gas.

Petrobras’ goal is to start producing in Tupi in 2010, with a pilot project of 100,000 barrels per day (5% of domestic production).

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Tags: oil exploration, Petrobras