Chinese group China National Oil & Gas Exploration & Development Corporation (CNODC) has decided not to exercise a contractual option to increase its stake in the giant Buzios pre-salt field offshore Brazil.
The news takes place a few days after Chinese partner China National Offshore Oil Corporation (CNOOC) took a different path by choosing to increase its participation in Buzios to 10% by paying $2.08 billion to state-controlled player Petrobras.
In November 2019, Petrobras on 90%, CNOOC on 5% and CNODC on 5% acquired the rights to produce surplus volumes from Buzios on top of the 3.1 billion barrels of oil equivalent that were originally granted to the Brazilian oil company in a transfer of rights agreement.
The two Chinese companies had options to double their respective shares in Buzios, but only CNOOC decided to do so.
The parties reached an understanding in July that saw CNOOC and CNODC pay a combined $2.94 billion to Petrobras to cover sunk costs and compensation for future production from Buzios, which is estimated to hold 11.3 billion boe in recoverable volumes in total.
With consolidation of both the reserves and the full field development plan under the new deal, the stakes held by each company at Buzios have been reassigned.
Petrobras was given a 92.66% operating stake in Buzios, with CNOOC and CNODC being entitled to 3.67% each.
However, with CNOOC increasing by 5% its participation in Buzios, the new arrangement will have Petrobras on 88.99%, CNOOC on 7.34% and CNODC on 3.67%.
Petrobras is already producing at Buzios via four FPSOs – P-74, P-75, P-76 and P-77, and production rates are among the highest in the pre-salt province.
A fifth unit, the Almirante Barroso FPSO, to be supplied by Japan’s Modec, is due to begin operation next year.
The oil giant has enlisted Netherlands-based specialist SBM Offshore to supply the sixth floater, the Almirante Tamandare FPSO., which will have the same processing capacity as the P-80 and will enter production in 2024.
Two consortia have recently been awarded big EPC contracts for the construction and delivery of a pair of floaters for Buzios.
Singapore’s Keppel Shipyard, in partnership with Hyundai Heavy Industries and BrasFels, has won the P-78 FPSO contract, while South Korea’s Daewoo Shipbuilding & Marine Engineering and Saipem bagged the P-79 FPSO order.
The tender for the P-80 FPSO - a unit which will have capacity to produce 225,000 barrels per day of oil and 12 million cubic metres per day of natural gas - has been pushed back to 2022.
With up to 12 floaters planned, Petrobras says the field is likely to reach a production plateau of more than 2 million barrels of oil per day equivalent.