TORA Production Expanded For Petrobras

Petrobras has been given the green light by Brazilian officials to upgrade the amount of reserves it can produce from four of its large presalt fields in the Transfer of Rights Agreement (TORA) areas.

Under newly-awarded extensions to presalt production volumes in the four TORA areas Búzios, Entorno de Iara, Florim and Nordeste de Tupi, the Brazilian major will be permitted to expand its volumes by a significant amount. According to estimates by Brazil’s Ministry of Mines and Energy and the National Petroleum, Natural Gas and Biofuels Agency (ANP), it will be permitted to increase total production volumes by between 9.8 and 15.2 Bboe.

These volumes are over and above the initial 5 Bboe production level contracted for the existing TORA areas. The move has been endorsed by the CNPE—Brazil’s National Energy Policy Council, which also outlines the level of signature bonus payable under the production sharing contract terms for each presalt area, and the level of profit oil to be paid to the government.

Signature bonuses will be payable at the rate of US $894 million (Real $2.0 billion) in 2015, rising by $447 million (R$1 billion) annual increments to $1.788 billion (R$ 4.0 billion) by 2018. The profit oil tax figure will be 47.42% in the Búzios area, 48.53% in Entorno de Iara, 46.53% in Florim and 47.62% in Nordeste de Tupi.

“Petrobras considers that the parameters approved by the CNPE will give to this project (surplus of the transfer of rights) the same conditions of attractiveness that are expected from the Libra field,” the state-owned operator declared.

Petrobras has also, meanwhile, confirmed a further confidence-building boost by the setting of its latest presalt production record which exceeded 500,000 bbl/d for the first time.

Fields in the Santos and Campos basins contributed a total of 520,000 bbl/d of oil on 24 June, of which 78% (406,000 bbl/d) was due to Petrobras, and the rest to partner companies.

Marking the record, Petrobras said the new production record was attained eight years after the first presalt discovery and it underlined that the figure has been achieved with a total of just 25 production wells (10 in the Santos Basin producing 274,000 bbl/d, and 15 in the Campos Basin producing 246,000 bbl/d). Accumulated production in the presalt region has surpassed 360 MMboe, via nine platforms—four producing exclusively from the presalt.

The new record contrasts with the time taken in other global regions to achieve the same figure—20 years in the U.S. Gulf of Mexico, and 10 years to reach 500,000 bbl/d in the North Sea, it went on to point out.

Presalt fields now account for 22% of oil production in Brazil by Petrobras. That proportion is set to rise to 52% of the country’s production total year-end 2018, it said, by which time total output is expected to hit 3.2 MMbbl/d, helped by the addition of 19 new Santos Basin presalt production units. Presalt oil production is expected to pass 1?MMbbl/d in 2017.

Additional volumes permitted under Transfer of Rights contracts (MMboe)

Source: Petrobras/Data from CNPE meeting June 24th, 2014

• The average well drilling time in the presalt layer of the Lula and Sapinhoá fields declined by 55% from 126 days in 2010 to 60 days in 2013, Petrobras also revealed, reckoning that this has saved it an average of US $66 million in drilling activities per presalt well. Last year it created its Well Cost Reduction Program, one of the pillars of its 2014 to 2018 Business and Management Plan. Over the next five years, about $70 billion will be invested in the construction of exploratory and production wells in Brazil—32% of the company’s total investment forecast in its Business and Management Plan, and 46% of its planned investment in E&P in Brazil.