Consortium wins production sharing contract for super-giant ultra-deepwater Libra field offshore Brazil
21 October 2013
A consortium of companies, including Royal Dutch Shell plc, Petrobras, Total, CNPC and CNOOC won a 35-year production sharing contract to develop the super-giant Libra pre-salt oil discovery located in the Santos Basin, offshore Brazil. The Brazilian regulator, Agência Nacional do Petróleo (ANP), estimates Libra’s recoverable resources are between 8 to 12 billion barrels of oil, with total gross peak oil production which could reach 1.4 million barrels per day.
Further appraisal is required to firm up this estimate, the development concept and a first oil date. The ultra-deep water Libra accumulation is located in Santos Basin, approximately 170 kilometers (105 miles) off the coast of Rio de Janeiro. The block covers approximately 1,550 square kilometers in water depths of around 2,000 meters (6,500 feet). The reservoir depth is around 3,500 meters below the sea floor (11,500 feet). Total investment over the life of the field is projected at $185 billion.
Shell holds 20% in the consortium, with Petrobras 40% as operator, Total 20%, CNPC 10% and CNOOC 10%. The consortium will work together in an integrated fashion to support Petrobras, the most experienced operator in the Brazilian pre-salt, and will incorporate each company’s deep water skills, people and technology for the success of the venture.
The production sharing contract is expected to be signed in November 2013. Consortium partners are paying a total signing bonus of US$1.4 billion, apportioned out according to their shares. In addition to the signing bonus, the consortium will have to conduct a minimum work program consisting of 3D seismic, 2 wells and an extended well test to be completed no later than end 2017.
Shell was the first International Oil Company to produce on a commercial scale in Brazil and has more than 100 years of history within the country, with around 65,000 boe/d of operated production in 2012. Shell is currently operating two Floating, Production, Storage and Offloading (FPSO) vessels in Brazil’s offshore—the Espírito Santo at Parque das Conchas and the Fluminense at the Bijupirá/Salema fields—and has recently announced projects to expand production at both fields.
Shell also operates and owns an 80% interest in the BM-S-54 block, where the Gato do Mato discovery is being appraised. Shell has also other interests in Brazil, including a Lubricants business and the joint venture Raízen, the leading sugar cane ethanol producer and fuels retailer.
Total is currently operator of the Xerelete field, located around 250 kilometers off the coast of Rio de Janeiro in the Campos basin and also owns a 20% interest in the BM-S-54 block, where the Gato do Mato discovery is being appraised. During the 11th round in May 2013, Total acquired interests in 10 new exploration permits, including 6 as operator.
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