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Oil Prices Under Pressure As U.S. Shale Supply Soars

Oil Prices Under Pressure As U.S. Shale Supply Soars

Continued production growth in the…

Start Of Oil Production At Libra Field Delayed

Deepwater

Crude oil production at the giant Libra field in the pre-salt layer of Brazil’s shelf will start later than initially planned due to problems with the installation of equipment, the head of a state energy company told media.

Ibsen Flores Lima, president of Pre-Sal Petroleo, added that initially, production was scheduled to start before this month’s end.

Libra, with recoverable reserves estimated at between 8 and 12 billion barrels of crude, is operated by a consortium including local state major Petrobras, France’s Total, Shell, and two Chinese companies: CNOOC and CNPC. Petrobras is the operator, with a 40-percent stake. Shell and Total have 20 percent each, and the Chinese giants hold 10 percent each.

Located in the Santos Basin, one of the most promising pre-salt areas, Libra is in ultradeep waters of up to 2,000 meters. So far, nine exploration wells have been drilled since the project’s inception in 2014, and three wells have been completed. A floating production, storage, and offloading vessel will be installed at the field to process 50,000 bpd daily. Another FPSO with a capacity of 180,000 bpd, is scheduled to be added at some later point, although plans were to have it up and running in 2016.

Total oil production from Brazil’s pre-salt layer reached 1.57 million barrels of oil equivalent daily in May, down from a record-high 1.588 million boed in January. The country’s total for May was  2.653 million bpd, up 6.7 percent on May 2016.

Brazil is now preparing another round of tenders to take place in September, which will include many blocks in the presalt area. Among the companies that may be among the bidders are Exxon, Rosneft, Gazprom, Lukoil, and Petronas.

Besides the presalt layer of its continental shelf, Brazil is also planning to tap its unconventional oil and gas resources. As Platts reported last week, Brazil is preparing a pilot project for unconventional oil and gas for next year, probably in the state of Bahia. According to reserve estimates, Brazil could be home to 5.4 billion barrels of tight and shale oil and 250 trillion cu ft of unconventional gas.

By Irina Slav for Oilprice.com

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