“O petroleo e nossa” or “The oil is ours!” has been the rallying cry of Brazil. In the last decade, Brazil has gone from a country that had to import much of the oil needed to run its economy, to an export country on the verge of joining OPEC. It took a national commitment for this to happen, because state owned oil companies are foundering elsewhere.

VLCC tanker

Shown here is the FPSO P-50 that was converted from a VLCC tanker. It works in the Albacoa Leste field in the Campos Basin on the Brazilian coast. It has a processing capacity of 180 000 barrels of oil per day.

With Petroleo Brasileiro SA (Petrobras), today reserves are at 11.7 billion barrels and recently the company hit a production milestone of over 2 million barrels of oil a day. “The daily production record of two million barrels of oil a day is an absolutely extraordinary feat,” said Petrobras Director, Guilherme Estrella. “This mark puts Petrobras among the world’s biggest companies. We now have passed the self sufficiency level that is fundamental to Brazil.”

The Tupi area in the Santos basin may lift Brazil to the status of a major oil exporting country. The estimated recoverable reserves are 5 to 8 billion barrels and would be added to the country’s proven reserves of oil and natural gas reported at 14.4 billion barrels.

“This find alone will push Brazil’s reserves from 24th place in the world into the top 10,” said Petrobras President, Jose Sergio Gabrielli. The Tupi discovery in block BM-S-11 is just a tiny part of the new oil province that the company believes is beneath existing fields. Petrobras is the operator with 65% interest, BG Group has 25% and Petrogal Galp Energy has 10%.

The analysis from eight test wells show high productivity and provide the company a basis to guarantee that Brazil has found its largest oil province. To investigate reservoir behavior, Petrobras plans an extended well test at Tupi in early 2010 with one well connected to a dynamically positioned (DP) FPSO already under conversion. This will be the second DP FPSO in the company’s fleet – the first is in the Roncandor field.

Two test wells were drilled in the Tupi area at the BM-S-11 block, a concession acquired during the second round of auctions in the year 2000. The Tupi reservoir lays 286 km south of Rio de Janeiro in 2140 m of water, more than 3000 m of sand and very hard rock, plus a 2000 m thick layer of an evaporitic salt.

Speaking at the new giant oil platform P-54 during the “first oil” ceremony in December, Estrella said. “The P-54 going online is a synthesis of all of the work team’s efforts as they have always worked with a lot of love and dedication for the company.”

Platform-54 is located in the Roncador field in the Campos basin and is one of six units to go online in 2007 that will add 590 000 barrels of oil per day. One month earlier, P-52, with the same oil capacity as P-54 went online along with an FPSO capable of lifting 100 000 barrels per day in addition to another platform producing up to 6 million m3 of gas per day. About 80% of the Brazilian oil extracted comes from offshore, but onshore oil is important to the tune of 230 000 barrels per day, per field and projections indicate considerable onshore growth in the years ahead.

FPSO undergoes conversion at the Keppel yard

An FPSO undergoes conversion at the Keppel yard.

The rate at which offshore platforms go online is very high. In 2008, three new oil platforms and one gas platform will be deployed, while eight more are scheduled in 2011 to 2015 time period. Projections by Petrobras call for production increases up to 2.4 million barrels of oil per day in the next three years and close to 3 million barrels per day by 2015.

To date the big finds offshore are in the Espirito Santos and the Campos Basins. Campos has a total area of 100000 km2 with 40 fields operated by Petrobras. Over 1130 wells have been drilled in both the shallow and deep water sections of this basin. The larger Santos basin has about 100 wells drilled, but based on exploratory wells drilled it appears that the deepwater part of the Santos Basin may include significant oil finds.

Investment in these oil fields is significant. From 2008 to 2012, Petrobras plans an investment of US$112 billion to bring the new discoveries to fruition. International oil giants also see Brazil as a player. But rather than compete headto-head with the state-owned oil giant, they are forming joint ventures. International oil companies are projected to invest US$25 billion in Brazil through 2011, which is about one-quarter of the total oil industry investment.

Much of the news about Petrobras concerns its oil activities. However, on the gas side, there will be a US$14.9 billion investment between 2007 and 2011. About US$11 billion will be invested by Petrobras and US$3.9 billion by partners.

On the gas infrastructure side, Petrobras is anticipated to invest US$6.6 billion with partners investing about US$500 million. In 2008, 4000 km of pipeline will be built to transport the natural gas. In the first quarter, the company is working on the construction of the third section of the Gasene pipeline. This section will be 946 km long and is scheduled to be completed in December 2009.

A number of FPSO’s are coming online off the coast of Brazil to rapidly increase the oil production that recently topped two million barrels a day. Modec’s FSO Cidade de Macee on lease to Petrobras has seen its first oil, received final acceptance and has begun its 20-year charter. Located in the Campos Basin in offshore Brazil, the FSO has storage capacity for 2.15 million barrels of oil and is permanently moored to an external turret. It will be the hub for several floating platforms including P-52 (Roncador), P-53 (Martim Leslie), P-51 (Martim Sul), P-55 (Roncador) and Roncado Module #4 that will be installed in the future.

Modec International LLC has also taken delivery of a 356 400 dwt FPSO Fluminense from Jurong Shipyard Pte. Ltd, a subsidiary of Sembcorp. The vessel was converted from a large crude carrier called the Sahara. The vessel is 363 m by 61 m by 29 m and has a production capacity of 81 000 barrels of oil per day and can store 1.2 million barrels of oil. The crude carrier required significant modification including the world’s largest external turret mooring system at 1300 metric tons. Other modifications include steel renewal, extensive coating and cathodic protection plus the installation of process skids, a flare tower, metering system, deck cranes and a helicopter deck. The vessel will work in the Campos Basin.

Petrobras has also selected Modec, Inc., to supply a FPSO in the Campos Basin and is the third FPSO for Modec to charter and operate for Petrobras. This project includes an FPSO that can process 100 000 barrels of oil per day, gas compression of 3.5 million m3 of gas per day and oil storage capacity of 1.6 million barrels. Modec will be responsible for all engineering, procurement, construction, installation commissioning and operation of the FPSO including topsides processing equipment, hull and marine systems, riser hangoffs, and the spread mooring system.

The FPSO will start production in the fourth quarter of 2008 with an operational lie of nine years with additional six-year options. One recently announced order from Petrobras was won by Rolls-Royce for an additional four gas turbine power generation packages, valued at US$73 million for use on a new offshore platform. The new order is for RB211-powered generating set packages for the US$1.2 billion P-56 semi-submersible platform, which is part of the development of the Marlim Sul field, located off the coast of Rio de Janeiro in the Campos Basin.

Four RB211 dual-fuel generating sets will be installed in two modules, and will provide complete electrical power for the P-56 platform. Once situated, the platform will be located 124 km off the coast, and will eventually be connected to 22 different wellheads at a depth of 1700 meters. Eleven of the wellheads will be oil and gas producers, with the remaining 11 used to inject water to increase the production flow.

Petrobras 23

An artist rendering of the Petrobras 23 dynamically positioned deep water drilling platform. This 101.5 m, by 82.5 m platform uses eight diesel engines and eight 2.4 MW thrusters, drills
in a water depth of 1900 m and has an operating displacement of 29 180 tons

The platform will weigh 46 500 tons, measure 125 m long, 110 m wide, and 54 m tall. It is designed to operate for 25 years, and will be capable of processing and treating 170 000 barrels of liquids and producing 100 000 barrels of oil, 6 million m3 of natural gas, and injecting 45 000 m3 per day of water into the reservoir. In about 18 months, Petrobras will set another milestone, the deployment of its first FPSO in Gulf of Mexico waters. The area to be developed is the Walker Ridge area about 290 km south of New Orleans, Louisiana, U.S.A. This development will take advantage of Petrobras’s experience in deepwater drilling with depths ranging from 2134 to 2438 m.

The fields are called Cascade and Chinook. There will be two subsea wells in Cascade and at least one in Chinook. The two sites are 30 km apart and each well will be drilled to a depth of 8230 m. For this project Petrobras intends to use a disconnectable turret buoy allowing the FPSO to move offsite during severe weather events, crude transportation via a shuttle tanker, free standing hybrid risers used to transport oil and gas from the subsea flowline to the FPSO and gas from the FSPO to the export pipeline, subsea electric submersible pumps to boost production from subsea to the FPSO, torpedo pile, vertically loaded anchors and a polyester mooring system.

Petrobras will be the operator of both the Cascade and Chinook fields and it owns a majority share of both. Other participants are Devon Energy and Total E&P USA. A number of international companies have been chosen as suppliers for Petrobras’ first FPSO in Gulf of Mexico waters. Keppel Shipyard Limited has obtained the contract for the FPSO conversion.

BW Pioneer Ltd., an affiliate of BW offshore has awarded Keppel a contract to convert the first FPSO for the Cascade and Chinook fields in the Gulf. To be named BW Pioneer, the FPSO will have a storage capacity of 600 000 barrels of oil, a process capacity of 80 000 barrels of oil per day and gas export facilities of 425 000 m3 per day. The FPSO will be leased by Petrobras America and production is expected in the first quarter of 2010.

When completed in the third quarter of 2009, the FPSO will be turret moored at a water depth of 2600 meters — reportedly the deepest water ever for an FPSO. FMC Technologies has been awarded a US$200 million contract to supply subsea systems. The subsea pumps built by FMC will boost production from subsea to the FPSO. FMC will supply four horizontal trees, three manifolds, control systems and two subsea horizontal submersible pumping systems in the first part of 2008.

Petrobras also contracted with Heerema Marine Contractors for the installation of the Chinook infield flowlines. The two pipe-in-pipe flowlines are each 19 km long with a 36 cm casing and a 23 cm inner pipe and will be installed in depths ranging from 2440 to 2680 m. Aker Kvaerner will supply subsea power cables and control umbilical lines for the project. Kvaerner will provide 70 km of high-voltage power cables and static and dynamic steel tube.

In other contracts Alliance Engineering will be the topsides engineer for the project. Alliance will assist Petrobras for up to three years with two work scopes for the Cascade and Chinook fields. From 2008 to 2012 Brazil’s Petrobras will invest US$4.9 billion in the U.S., out of a total investment of US$112 billion. A total of US$15 billion will be spent out of Brazil. In 2010 Petrobras will start producing 20 000 barrels a day from the three wells at the Chinook and Cascade fields.

Output levels will gradually increase to 80 000 barrels a day by 2014 as more wells come on line. In July Petrobras produced 10 799 barrels of oil equivalent or BOE from its fields in the U.S. The Brazilian company said it expects to produce 130 000 barrels of oil a day from the Gulf of Mexico by 2013. In other international projects, Petrobras will spend US$2.8 billion in Argentina in the 2008 to 2012 time period. From 2008 to 2012 Petrobras will spend US$900 million on activities in Angola and US$1.4 billion in Nigeria, which will soon become one of Petrobras’ fastestgrowing overseas output regions.

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