CRE Special Studies

The Tupi field discovery, a huge blanket of oil below the salt layer in the Campos Basin, was made possible after drilling two wells. The first one with a positive result is 286 kilometers (177 miles) from the coast of Rio de Janeiro and the second is little more to the southeast. In partnership with the Portuguese company, Petrogal, and the British company, BG, Petrobras started tests in the area in July 2006. But only in February after the Brazilian National Oil Regulatory Agency (ANP) approved an assessment plan of the light oil did they intensify their search.

Tupi is estimated to produce between 5 billion and 8 billion barrels of this type of oil, which is easier to be pumped from the wells and has a higher market value because it can produce a greater number of products. Currently, Brazil is a light oil importer since up till now, the oil in the Campos Basin, where 90% of the national production is concentrated, is heavier.

When the discovery was announced last month, many people were surprised. However, the existing volume in the area has already been the object of discussion for some months. At the end of August, the Credit Suisse Bank disclosed a report saying that executives from one of the partnerships with Petrobras were optimistic with the possibility of the field having a reserve of up to 10 billion barrels. On one occasion, the government-run company denied the finding, saying that the deposit was still being analyzed.

However, it was already clear that tests showed high oil and gas productivity in Tupi. Using a vessel with a kind of ultrasound, Petrobras studied the area’s geophysical characteristics. Based on this information, samples are drawn and wells are drilled. Afterwards, fuel quality is verified. The ultrasound also helps with estimating the reserve size and the layer thickness where the oil and gas are found. With this data, fuel volume in the location is calculated. Petrobras found fuel with the same density and characteristic in 8 of the 15 drilled wells which were tested along the stretch. All produced light oil and associated natural gas.

To extract the oil in the Tupi area, Petrobras plans to use what it has learned from other fields. One of these is Cachalote field, in the state of Espirito Santo and is the first from the pre-salt area in operation in Brazil, and is 100% owned by Petrobras. About 50 kilometers off the coast, the company will be able to use a pipeline to connect the platform to one of the land bases. The company decided to invest more heavily in the locale with its sight on exploring Tupi.

The plan in Cachalote is to “ignore” the heavy oil already discovered in the concession area and go deeper to below the salt layer for exploration of light oil already found. Another field that will serve as experience is the Carioca field, a neighbor of the Tupi field where reserves were also found in the pre-salt layer. The area is controlled by Petrobras, BB, and the Spanish company, Repsol.

A report from the American consulting firm, PFC Energy, estimates that Petrobras will need to spend US$15 billion to US$20 billion to develop production at Tupi (in 2013. This represents 17.85% of the total investments programmed in the 2008-2012 strategic plan where investments of US$112 billion are anticipated, not including Tupi. This assessment is based on the current forms of production on floating platforms. Specialists believe new methods with lower costs will need to be developed. In the American consulting report, it should be noted that the discovery of light oil should lead Petrobras to review plans for converting its refineries which are being adapted to process heavy oil.

According to projections, Petrobras will be able to produce at least 1 million barrels per day when the Tupi field, granted in 2000 during the Second Bid Round, will become active. The quantity is almost double the largest Brazilian field, Marlim, where 650,000 barrels/day are pumped.

It is still not known if the stretch of pre-salt layer has a continuous accumulation of oil or if there are various huge fields next to each other that could contain 80 billion barrels of oil. At Petrobras, the bet is on dozens of fields at great depths that are the same size of Tupi, interconnected along the 800 kilometers between Espirito Santo and Santa Catarina.”

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