Americas > South America > Brazil > Brazil’s Libra deepwater oilfield expected to yield a million bpd

Brazil: Brazil’s Libra deepwater oilfield expected to yield a million bpd


The consortium that is awarded the right to develop the Libra prospect will likely need to drill for about four years next signing its production-sharing agreement, with commercial production likely to begin in the fifth year, ANP Director-General Magda Chambriard told a press conference in Rio de Janeiro.

The Libra deepwater oil field that Brazil plans to auction off Oct 21 will yield minimum output of 1 million barrels of crude per day, the National Petroleum Agency, ANP, said on Friday. That production would be equivalent to half of Brazil's current output of 2 million bpd.

ANP studies indicate that between 12 and 18 production platforms will be needed to develop Libra, whose recoverable oil is estimated at between 8 billion and 12 billion barrels, nearly equivalent to Brazil's current proven-reserve base of 14 billion barrels.
Libra, located some 183 km off the coast of Rio de Janeiro national in an area of the Atlantic Ocean where water depths range from between 1,700 meters and 2,400 meters, will be the initial pre-salt field to be auctioned off by Brazil.

The pre-salt frontier, a series of ultra-deep oil fields that were discovered in recent years and stretch for some 800 km off the coasts of the south-eastern states of Espirito Santo, Rio de Janeiro, Sao Paulo and Santa Catarina, could dramatically increase Brazil's proven-reserve tally and transform the country into a major crude exporter.

But accessing those fields, so-named because they are located under water, rocks and a shifting layer of salt at depths of up to 7,000 meters below the surface of the Atlantic, will be very costly and pose an enormous technical challenge.

The auction as well will be the initial Brazil will hold under a new production-sharing agreement, or PSA, system for pre-salt reserves.
In the PSA system, oil companies bear the mineral and financial risk of the project and use the money from oil sales to recover their costs. The money that remains next that is known as “profit oil” and is shared between the company and the government.
The winner of the auction will be the consortium that pledges to provide the national the highest proportion of profit oil.

ANP estimates that the Brazilian government will receive roughly 75% of the profits from the Libra field, taking into account its share of the profit oil, inclunding taxes and royalties.
Under the new contracts for the pre-salt fields, national-controlled oil giant Petrobras must be the sole operator of each PSA and have a minimum 30% stake in the all pre-salt projects. The remaining 70% may be divided part a maximum of five other companies.

Related Articles
  • Brazil's top two construction tycoons arrested in connection to Petrobras case

    2015/06/23 In morning raids that netted 12 arrests in four states, police as well apprehended Otavio Marques Azevedo, chief of Andrade Gutierrez, the second-major Brazilian construction firm Andrade Gutierrez.Brazilian police arrested on Friday Marcelo Odebrecht, the chief of Latin America's major engineering and construction company Odebrecht SA, ensnaring the majority high-profile executive to date in the corruption investigation at national-run oil firm Petrobras. A lead prosecutor, Carlos Fernando dos Santos Limas, said he had “no doubt” Odebrecht and Andrade Gutierrez led what he called a “cartel” that overcharged Petrobras for work and passed on the excess funds to executives and politicians.
  • Brazil' economic activity further contracts in April

    2015/06/23 High inflation and dwindling confidence have dragged down consumption, until recently the major engine of increase in Latin America's major economy.Economic activity in Brazil fell sharply in April from March, worse than by presently negative market estimates and showing still additional evidence the once-booming economy is heading toward a recession. “This is an extra data point confirming the weakness of increase in Brazil and supports our expectation for a 0.7% quarter versus quarter contraction in real GDP during the second quarter,” Barclays' economist Bruno Rovai said in a note to clients. Rovai said the drop in the index has totaled 2.2% so far this year.
  • Surveyed consider Brazil's government to be “great” or “good.”

    2015/06/23 The Datafolha poll published by Folha de S.Paulo says only 10% of those surveyed consider Brazil's government to be “great” or “good.” By contrast, 65% said the government is a “failure.” “It's a new record in Datafolha polls since we started conducting them in January 2011,” at the same time as Dilma took office, reported Folha de Sao Paulo, which is owned by the same group as Datafolha. Public support for Brazilian President Dilma Rousseff has slipped to a record low, with her disapproval ratings rising to 65%, according to pollsters Datafolha and published on Sunday. Support for the embattled leader caught by a sliding economy and embroiled in a major graft scandal involving national-owned corporation Petrobras, slumped to 10%. Major protests have rocked Brazil in recent months, with some critics calling for her to be impeached.
  • Uruguay and Brazil summit to consider a more flexible Mercosur

    2015/05/22 According to a release late Wednesday from the Brazilian foreign ministry “the presidents will discuss advances in the major bilateral integration projects and regional and multilateral issues, with emphasis on Mercosur”. Even at the same time as the release does not mention it, the coincidence of Brazil and Uruguay in reviewing Mercosur Decision 32/2000 will be the core of discussions. The Decision 32/2000 which was adopted fifteen years ago establishes that Mercosur full members, Argentina, Brazil, Paraguay, Uruguay and Venezuela (which joined in 2011) must negotiate any trade agreement jointly, which for a lot of business organizations represents a straightjacket. Uruguayan president Tabare Vazquez will be meeting his peer, Dilma Rousseff in Brasilia this Thursday to address a dense bilateral agenda, and more specifically the workings and future of Mercosur, in search for a more flexible group, open to agreements with third parties.
  • China’s Tianjin Airlines buys 22 aircraft from Brazil’s Embraer

    2015/05/21 Brazilian aeronautical company Embraer will supply 22 jet aircraft to Tianjin Airlines, of China, a subsidiary of the HNA Group, under a final arrangement signed Tuesday, the company said in a statement. This arrangement, worth US$1.1 billion, includes 20 E195 aircraft and two E190-E2, which makes the HNA Tianjin Airlines group the initial Chinese airline to purchase E2 E-Jets aircraft.