First Oil Achieved From Petrobras Campos FPSO

Published at 06:56PM - 16/02/16

First oil achieved from Petrobras Campos FPSO, as the Brazilian state run company steams ahead despite mounting debts from the development.

Petrobras announced the news Thursday saying it had “ began operating the Cidade de Maricá platform, in the Lula field (Lula Alto area), in the pre-salt layer of the Santos Basin.”

First Oil Achieved From Petrobras Campos FPSO

The new production stream is looking to bring a further 150,000 barrels of oil and 6 million cubic meters of gas per day to Petrobras’ current production rates, although no statement has ben made on how long it will take to get the FPSO up to full production.

Located in the Campos Basin, approximately 168 miles (270km) offshore Brazil, in a water depth of 6,955 feet (2,120m); Cidade de Maricá produces from the areas vast pre-salt layer.

Pre-salt Oil

Oil and gas deposits in the pre-salt layer are reached after drilling through both the earth’s rock and salt layers and typically beyond 13,000 feet (4,000m), with its presence mainly isolated to West African and Brazilian regions.

In Brazil’s case pre-salt is located beneath approximately 6,500 feet (2,000m) of roughly equal layers of salt and rock, in water depths ranging 6,500 feet (2,000m) to 13,000 feet (4,000m).

Once seen as too great an engineering and a technical challenge, pre-salt oil and gas extraction is now at least viable, but remains the most expensive production method within the offshore industry.

According to Petrobras their current rate of platform installation within the pre-salt Campos Basin currently stands at around one every nine months; with the basin’s current production accounting for around 35% of Brazil’s total oil output.

Petrobras Problems

This rapid development rate, the financially demanding characteristics of the basin’s pre-salt, and the single handed approach that Petrobras is forced to operate goes a long way to explain at least half of its problems.

The state run company currently holds the two unenviable titles of ‘biggest debt of any oil and gas company worldwide’ and ‘biggest debt of any company in South America’; currently standing at around US$ 130 billion and is looking to sell off at least US$19 billion of assets to survive.

The debts have been accumulated by both years of corruption running through Petrobras and the intrinsically linked Brazilian government; and the recent years of ploughing on alone with its expensive pre-salt ambitions.

Brazilian Oil Industry Change

In line with Brazilian law Petrobras must hold at least a 50% stake in all oil and gas operations, whether on or offshore, which keeps the majority of the world’s oil and gas majors from investing the huge sums of money required to develop the pre-salt reserves.

One key figure that has been urging Brazil to change is Shell’s CEO, Ben van Beurden.

In a recent interview with Brazilian media van Beurden said: “I am aware that there is discussion about the role of Petrobras in the pre-salt. Our position is that it is up to the government and congress to decide.”

“But I think it makes sense to call other partners with the technology, and with the investment. I don’t see how this is not beneficial for Brazil.”