In 2009, Brazil was proven to hold 12.6 Bbbl of oil reserves (ANP estimated this to have risen to 14 Bbbl in 2010), second largest in South America after Venezuela. The offshore Campos and Santos basins on the country’s southeastern coast contain the vast majority of Brazil’s proved reserves. According to the BP Statistical Review 2010, in 2009 Brazil produced 2.2 MMbbl/d of oil, of which 90% was crude oil.

Going deeper

The bulk of offshore reserves are thought to be in deep water. This fact has been a driving factor for innovation and has led Petrobras to become a global pioneer in its use of offshore production technology – most notably in the subsea and floating production system (FPS) sectors.

The water depth distribution of the Brazilian FPS fleet shows a very marked trend toward deepwater production. The first deployment of an FPS in water depth greater than 1,640 ft (500 m) occurred in 1983 with Petrobras’ seventh floating platform installation, the P-15, moored in 1,640 ft (500 m) of water to serve the giant Pirauna field. Since then, deepwater installations have dominated and will continue to do so.

The majority of FPSs operating in Brazilian waters are conversions, and some units have been upgraded and redeployed several times. Most of these vessels are owned by Petrobras, although in recent years the operator has shown a willingness to take the leasing option to fulfill its FPS requirements.

The country’s oil and gas industry was opened up to international players in the late 1990s, and this has allowed foreign and domestic firms to take up a presence in Brazilian waters via joint-venture arrangements with Petrobras or by acquiring concessions in the country’s licensing rounds, which have been held annually since 1999. Most of the foreign entries to date have been in blocks that are still in the early phases of exploration. This explains why Petrobras will dominate development activity off the country to 2015, with 78% of the 40 prospective FPS installations.

Investing in FPSs

Over the next five years, should all prospective FPS installations go ahead, investment of more than US $22 billion would be required over the 2011-2015 period, of which more than $18 billion would be directly attributed to Petrobras-led developments. This accounts purely for visible prospects – additional FPS prospects for fields in the early stages of planning or conceptual design could account for additional (or alternative) solutions.

Prospective installations by unit type indicate the anticipated level of activity offshore Brazil through 2015. (Graph courtesy of Douglas-Westwood)

Floating production, storage, and offloading vessels (FPSOs) dominate, accounting for 36 of the 40 prospective installations. Requiring lower capital, conversions often are the preferred economic choice but can be limited by the quality of tankers and other vessels available for conversion.

Many of the prospective installations are redeployments – i.e., the movement of a unit from one field to another. While FPS units typically enjoy a field life of 20 or more years, they can be placed on fields for shorter durations and can be used for extended well testing programs or as short-term replacements for other production facilities. This is particularly relevant to leased FPSOs, which are designed to be more economically flexible. Redeployed vessels account for 18% of the prospective installations for the 2011–2015 period.

Petrobras

Of Petrobras’ 31 installation prospects, 26 are related to FPSO projects, two installations are related to an FPSO with drilling capabilities (PIPA Dynamic Producer FPDSO), and two are floating production semisubmersibles (FPSSs) – namely the P-55 for Roncador and the Jupiter FPSS. Only one prospect is a tension-leg platform (TLP) – the P-61 dry tree TLP for Papa Terra.

While the vast majority of Petrobras’ FPS prospects are in deep water, there are a number of units that are set to be installed in shallower water. One such prospect is an FPSO for the Tiro and Sidon fields in the Santos basin in 820 ft (250 m) water depth. The EPC contract for the FPSO was awarded to Teekay, and the Cidade de Itajai FPSO (formally ARCII) is currently being converted in the Jurong shipyard for use on this field. Installation is expected in 2012.

Other players

Brazilian independent OGX has four prospective FPS installations scheduled from 2011 to 2015. FPSOs are expected to be installed on the Etna, Pipeline, Vesuvio, and Waimea fields.

Three foreign operators have prospects for the 2011-2015 period – Anadrako, BG Group, and Shell. Statoil also is involved in the Brazilian FPS sector and in April of this year saw the commencement of production from its Peregrino field. This development has 37 wells tied back to two wellhead platforms and an FPSO, which is leased from Maersk Oil. Sinochem holds a 40% interest in the field.

Anadarko is considering an FPSO for its deepwater Wahoo field in the Campos basin, where start-up is scheduled for 2014.

BG Group has partnered with Petrobras on the Corcovado project. Discovered in 2009, the field lies in 2,684 ft (818 m) water depth in the Santos basin. Production is expected to begin in 2014 with an FPSO development plan under consideration.

Shell is involved in two FPS projects in Brazil – a second FPSO for the company’s Parque das Conchas development and a possible TLP for the Atlanta and Olivia fields.

Deep water

Two key features of Brazilian deepwater reservoirs – their giant size and their large lateral expanse – have meant that development generally has involved a phased process. Typically, this begins with a pilot or early production phase using a single FPS, followed by the deployment of additional units in subsequent development phases. Thus, some fields are multi-FPS developments, the leading example being Marlim field, which currently has nine floaters in operation (five FPSOs and four FPSSs).

A new regulatory framework for the presalt reserves was released in August 2009, under which Petrobras would act as operator and maintain a 30% stake in each development. Some believe that the new framework will slow development and increase the government’s profits beyond acceptable limits.

Brazil has seen numerous deepwater projects move into the production phase, including:

  • Cidade de Sao Mateus FPSO testing on the Lula (Tupi) field in May 2009;
  • Frade FPSO on the Frade field in June 2009;
  • P-53 FPSO on the Marlim Leste field in December 2008;
  • P-51 FPSO on the Marlim Sul field in January 2009;
  • Cidade de Niteroi FPSO on the Marlim Leste field in March 2009;
  • Espirito Santo FPSO on the Parque das Conchas project in July 2009;
  • Cidade de Santos FPSO on the Urugua field in July 2010;
  • Capixaba FPSO on the Cachalote field in June 2010;
  • Cidade de Angra dos Reis FPSO on the Lula (Tupi) field in October 2010;
  • P-57 FPSO on the Jubarte field in December 2010; and
  • Cidade de Sao Vicente FPSO extended well test on the Lula North East field in April 2011.

The trend toward deeper developments is likely to continue into the future as fields in the Campos and Santos basins are further developed. Out of the 40 prospective FPS installations, only nine are scheduled for installation in more than 1,640 ft (500 m) water depth. There also is an increasing number of ultra-deep (deeper than 6,562 ft or 2,000 m) developments, notable projects being Franco, Guara, and Lula (Tupi).