Decommissioning costs for Brazil's mature, offshore Campos basin could come it at a whopping US$8 billion through 2025, but according to Wood Mackenzie, investing that same amount instead in redevelopment could significantly boost production by unlocking billions of barrels of oil.
The energy consultancy estimates in a new report that US$8 billion in decommissioning costs are expected in the Campos basin between 2018 and 2025, but an equal investment in development could increase the basin's oil production by 230,000 barrels of oil equivalent (boepd) per day in the same time period.
"…Investing the US$8 billion in the redevelopment of these mature fields could extend the life of these fields and delay decommissioning," says Woodmac, which has explored the redevelopment plans for the Roncador, Marlim, and Polvo fields.
If recovery factors are increased to the level of international analogues, 5 billion barrels of oil to the basin reserves could be unlocked, the consultancy said.
The US$8 billion proposed for the decommissioning of these mature fields could be invested and postpone 60 percent of decommissioning costs to beyond 2030, generating extra royalties and jobs, the author of the Wood Mackenzie report, Luiz Hayum, analyst in the Upstream Research team for Latin America, says.
Extending the life of the mature fields at Campos could add US$3 billion to royalty payments to the Brazilian government, according to the report's details carried by Reuters.
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Brazil's state-held oil firm Petrobras, which invests very little in the Campos basin, is looking to attract international investment to revive production at mature fields while it focuses on the new promising offshore area in Brazil-the pre-salt layer.
Earlier this year, Norway's Equinor completed the acquisition of a 25-percent non-operated interest in the Roncador oilfield in the Campos basin for US$2 billion in cash and contingent payments of up to US$550 million related to investments in projects to increase recovery from the field. Petrobras retains operatorship of Roncador and a 75-percent interest in the third-largest producing field in Brazil.
Under the deal, Petrobras and Equinor will aim to increase Roncador's recovery factor by five percentage points, boosting the total remaining recoverable volumes from 1 billion boe to more than 1.5 billion boe.
By Tsvetana Paraskova for Oilprice.com
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