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Petrobras says Sergipe oil find to require expanded output plan
September 18, 2014 / 7:37 PM / 3 years ago

Petrobras says Sergipe oil find to require expanded output plan

* Sergipe needs more than two production ships-Petrobras

* Petrobras, ONGC, Videocon, Bharat finds to need pipeline

* Offshore Sergipe oil is light, more valuable crude

By Jeb Blount

RIO DE JANEIRO, Sept 18 (Reuters) - A giant oil and gas discovery off the coast of Brazil’s Sergipe state holds enough hydrocarbons for state-run Petrobras and its Indian partners to build an expensive undersea natural-gas pipeline and expand development beyond two scheduled production ships, a company official said on Thursday.

Petrobras, formally known as Petroleo Brasileiro SA , has said it expects to install a 100,000-barrel-a-day floating production, storage and offloading (FPSO) ship in the area in 2018 and another in 2020. Petrobras expects to take bids to build the first FPSO in November.

“These discoveries will require various other production systems but we have planned two so far,” Claudio Madeira, geological interpretation manager for Petrobras, said at an industry event in Rio de Janeiro. “A gas pipeline will be built for this area.”

The pipeline is needed to carry natural gas to shore from the from the FPSOs, he said. Oil will be loaded direct from the FPSOs to tankers.

A growing number of analysts as well as Sergipe state officials have criticized what they believe are delays in developing the discovery. Sergipe holds higher-grade oil in less technically demanding reservoirs than those near Rio de Janeiro, which have received the bulk of Petrobras’ recent investment but are years behind schedule.

While Madeira said Petrobras is still evaluating how much oil and gas has been found in the area’s wells, some as far as 300 kilometers (186 miles) from the country’s northeastern Atlantic coast, government and industry officials told Reuters a year ago they contain at least 1 billion barrels of recoverable oil.

That’s enough to meet all the needs in the United States, the world’s largest oil consumer, for nearly two months. It’s also enough to make Sergipe Brazil’s the biggest new oil region since the 2007 announcement of the subsalt, a series of giant reserves near Rio de Janeiro trapped deep beneath the seabed by a layer of mineral salts.

The discoveries are in three adjacent blocks, one owned by Petrobras alone, a second by Petrobras and India’s Oil and Natural Gas Corp and a third by Petrobras and IBV Brasil SA, a joint venture between India’s Videocon Industries Ltd and Bharat Petroleum Corp.

Exploration and evaluation wells in Sergipe have found high-quality light crude at an average of 40 degrees on the American Petroleum Institute scale and large quantities of gas, Madeira said. The higher on the API scale, the lighter and more valuable the crude. Most Brazilian oil produced is closer to 20 API.

Petrobras and its partners have drilled 24 wells in the Sergipe deepwater offshore area and have struck oil and gas in 16 of them, Madeira said.

While Petrobras has been exploring in Sergipe for decades and has operating fields on shore and in shallow water, it only drilled into deep-water areas, where the latest oil was found, starting in 2010. (Editing by Jeffrey Benkoe)

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