Petrobras halted drilling at its largest oil discovery in deep waters, two people with knowledge of the matter said, underscoring the technical challenges facing the company’s new management team.
An unplanned procedure to retrieve equipment stopped work for more than a week at a well in Libra, the people said, asking not to be named because it hasn’t been made public. Rio de Janeiro-based Petrobras didn’t immediately respond to a request for comment on the incident and if it had been resolved. Commercial production is expected to start in 2020.
While Petrobras expanded output to a record in December at the so-called presalt region that holds Brazil’s largest deposits, it also has run into drilling disruptions in the past. In 2010, it abandoned the first well it started at Libra, citing mechanical issues. In 2011, it briefly halted production at the Sapinhoa Field in the same region after a pipe ruptured.
The snag shows that the challenges facing CEO Aldemir Bendine extend beyond finance and corruption as he chooses a new management team. The company is deploying the largest fleet of deepwater production vessels in the industry in an effort to boost output and pay down debt. All that as oil trades near six-year lows after an almost 50% drop.
Bendine started the job Feb. 6 after former CEO Maria das Gracas Foster and five of her executive managers quit amid difficulties reporting graft-related writedowns.
Government Auction
Petrobras took a 40% stake in a 35-year concession for Libra, the largest discovery in Brazil’s history, in a government auction in October 2013. It was the first auction of subsea prospects, known as presalt, using a production-sharing model. Petrobras drilled the first well in 2010 on behalf of oil regulator ANP as part of a project to gather data on the region before offering the areas.
Total and Shell each hold a 20% stake of the concession while China National Petroleum Corp. and Beijing-based Cnooc Ltd. have 10% apiece.
Libra is estimated by Brazil to hold as much as 12 Bbbl of recoverable crude, or 50% more than the proven reserves of OPEC member Ecuador. Schahin Petroleo & Gas SA, the owner of the Cerrado drillship Petrobras hired last year to drill two wells at Libra, didn’t immediately respond to an e- mail seeking comment on the rental fees.
Recommended Reading
Solar Panel Tariff, AD/CVD Speculation No Concern for NextEra
2024-04-24 - NextEra Energy CEO John Ketchum addressed speculation regarding solar panel tariffs and antidumping and countervailing duties on its latest earnings call.
NextEra Energy Dials Up Solar as Power Demand Grows
2024-04-23 - NextEra’s renewable energy arm added about 2,765 megawatts to its backlog in first-quarter 2024, marking its second-best quarter for renewables — and the best for solar and storage origination.
BCCK, Vision RNG Enter Clean Energy Partnership
2024-04-23 - BCCK will deliver two of its NiTech Single Tower Nitrogen Rejection Units (NRU) and amine systems to Vision RNG’s landfill gas processing sites in Seneca and Perry counties, Ohio.
Clean Energy Begins Operations at South Dakota RNG Facility
2024-04-23 - Clean Energy Fuels’ $26 million South Dakota RNG facility will supply fuel to commercial users such as UPS and Amazon.
Romito: Net Zero’s Costly Consequences, and Industry’s ‘Silver Bullet’
2024-04-22 - Decarbonization is generally considered a reasonable goal when presented within the context of a trend, as opposed to a regulatory absolute.