Wild ride: Brazil's Tupi discovery has forced the country to rethink its offshore development strategy
- Brazil clears table on Tupi bonanza
- Petrobras scores big at Tupi
- Wildcat to test subsalt off Brazil
- Tupi tests raise giant prospects
- Fresh hope for Santos province
- Santos basin set for reserves surge
- Petrobras hits subsalt sweet spot
- Subsalt sparkles offshore Brazil
- Petrobras sharpens drill bit in Santos play
- Santos sub-salt dish looks tasty
- 'Up to 10 billion boe' in Tupi
- Petrobras tight-lipped as Tupi well takes time
- Brazil giant onsub-salt mission
- Wildcat well worth its salt for Petrobras
- Petrobras cool on Tupi reports
- Petrobras waits on Tupi South tests
US players unfazed by Brazil blocks move
US producers with interests in Brazil’s offshore energy sector were taken by surprise by the country’s abrupt retraction of 41 key exploration blocks from its forthcoming auction round yesterday, but key players said the decision would have little effect on their development plans in the country.
Brazil’s government moved quickly yesterday to pull the 41 blocks, concentrated in the Espirito Santo, Santos and Campos basins, hours after state oil giant Petrobras announced a massive light oil discovery, estimated at between 5 billion and 8 billion barrels, beneath salt layers in the Tupi field in the Santos basin.
The deep-water find is the biggest in Brazil’s history, and has the potential to push the country, which only recently became a net producer of crude, into the top echelon of global producers, observers said.
Petrobras said its evaluation of other ultra-deep sub-salt targets in the country’s southern and south-eastern basins was promising, suggesting further big finds may exist.
The company plans to start production from the Tupi deposit in 2010 or 2011, with output of up to 100 barrel per day.
Petrobras’s partners on the discovery are the UK’s BG and Portugal’s Galp Energia.
Although 271 blocks will still be on offer in the auction round on 27 and 28 November, observers said Brazil had acted to keep the most promising areas out of foreign hands in the wake of the dramatic discovery.
They said foreign companies looking to gain a larger slice of Brazil’s offshore oil patch would be forced to rethink their plans, and many might loose their appetite for investment in the round, the country’s ninth.
However, US players in Brazil contacted by Upstreamonline suggested the changes would have little effect on their operations in Brazil or their future development plans there.
“We’ve evaluating the announcement to determine what our opportunities in the upcoming round might be,” said Chip Minty, a spokesman for Oklahoma City-based Devon Energy.
Minty said Devon had taken part in earlier rounds and was heavily involved in offshore exploration in Brazil.
Along with Dutch supermajor Shell, Devon is the only foreign company with producing developments off Brazil.
Petrobras owns minority stakes in all foreign-held offshore projects in the country.
Meanwhile. US independent Anadarko said in a statement the decision to remove the blocks would not affect plans for its existing Peregrino heavy oil project off Brazil, which the company is developing with Norway’s StatoilHydro with first production expected in 2009 and 2010.
It would also have no impact on its existing blocks or exploration commitments in the Espirito Santo and Campos basins, spokesman John Christiansen said.
The company holds more than 1 million gross undeveloped acres in the two basins. The company gained access to Brazil via its acquisition of Kerr-McGee last year.
Houston natural gas player El Paso also said the move was unlikely to affect its operations.
“This will not alter our plans at all,” said spokesman Robert Newberry. “We’re operating down there and we’re OK with our strategy,” he said.
The company recently announced two new shallow-water oil and gas discoveries extending its Pinauna field on the Camumu basin, where most of its Brazilian activity is focused.
Shell’s Houston office did not respond to a request for information.