Royal Dutch Shell’s Brazilian subsidiary BG E&P Brasil and partners began production in a deepwater field in the Santos Basin on Friday, according to a new report by World Oil.
The floating production storage and offloading vessel (FPSO) P-66 sits at a depth of 2,150 meters and can extract 150,000 barrels of oil and six million cubic meters of natural gas per day. The vessel is the first in a series commissioned by Petrobras to exploit the BM-S-11 block within a consortium.
“Achieving production at Lula South is an important accomplishment in the Santos Basin, and we recognize Petrobras’ delivery of this critical milestone,” Andy Brown, head of upstream operations for Shell, said. “The consortium has additional FPSOs in this series planned over the next three-years. Across Shell’s deep water business in Brazil, we’re investing in projects with competitive break-even prices, and our presence as Brazil’s second largest oil producer continues to grow.”
Shell owns a 25-percent stake in the Lula field of the BM-S-11 block, while Petrobras owns 65 percent and Portugal’s Galp owns the remaining 10 percent through a local subsidiary.
According to some analysts, Petrobras is on the mend: the graft scandal that shook the company is slowly dying out and its performance is improving: the company surprised markets by reporting an operating earnings for 2016, of $4.3 billion, from a loss of $1.13 billion for 2015.
Petrobras’ debt load continues to be the heaviest in the oil industry, still more than $100 billion, but some observers believe that this will now begin to improve, with sales this year possibly reaching $100 billion thanks to the company’s production expansion plans.
Brazil is not part of the Organization of Petroleum Exporting Countries (OPEC), nor was it part of the 11 nations that agreed to coordinate production cuts with the bloc to rebalance markets.
By Zainab Calcuttawala for Oilprice.com
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Zainab Calcuttawala is an American journalist based in Morocco. She completed her undergraduate coursework at the University of Texas at Austin (Hook’em) and reports on…