Petrobras is the largest deep-water operator in the world, with 22%+ of its activity in the deep. Petrobras is the first company in the world to find and produce gas under a layer of salt on the continental shelf. Its pre-salt discoveries have the potential to position Brazil as having one of the world’s largest oil reserves. Petrobras has proven reserves of about 16 billion barrels of oil, which is forecast to double over the next 3-4 years with new discoveries, and is currently producing almost 350,000 barrels per day of oil equivalent in the pre-salt layer of the Santos and Campos Basins—beyond their expectations. By 2016, the company’s pre-salt production should reach 750,000 bpd, and the forecast for 2020 is nearly 2 million bpd. It sounds fabulous—on paper.
In October 2013 in Brasilia, the National Petroleum Agency (ANP) will hold its first auction for pre-salt oil when it awards a concession for the Libra field, located off the coast of Sao Paulo and Rio de Janeiro in the Santos Basin. This, according to the ANP, will be the last pre-salt auction before 2015 at the very earliest.
Following a 3D survey the ANP estimates Libra to hold 26 to 42 billion barrels of oil equivalent, of which 8 to 12 billion barrels are currently classified as recoverable, making this a historic auction.
However, as a pre-salt field Libra presents some unique challenges: oil and gas deposits will be costly and technically difficult to extract.…