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Brazil’s offshore oil prospect to produce ‘significant’ flows

A worker checks equipment at the Cidade Angra dos Reis offshore platform in the Lula oil field, about 300 kilometres from the coast of Rio de Janeiro, in this file photo.


An offshore oil prospect owned by Brazil's Petroleo Brasileiro SA, Barra Energia, QGEP Participacoes SA and Portugal's Galp Energia SGPS SA will have significant flows when it starts output later this decade, a project partner told investors on Thursday.

Wells in the Carcara offshore oil prospect, one of the largest recent "subsalt" discoveries in Brazil, will likely produce as much as 35,000 barrels of oil and natural gas equivalent a day (boepd) when it begins producing in 2018, QGEP, which owns 10 per cent of the prospect, said on a conference call with investors.

"We are expecting these levels of flows, orders of magnitude similar to the Lula Field," Sergio Michelucci, director of exploration and production at QGEP, said.

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At current market values for Brent Crude oil, output from such a well would be worth about $3.92-million (U.S.) a day or about $1.43-billion a year. Most Brazilian oil trades at a discount to Brent.

The Carcara prospect in the BM-S-8 block is 66-per-cent owned by Petrobras, as Petroleo Brasileiro is known, 14 per cent by Galp and 10 per cent each by QGEP and Barra Energia. China's China Petroleum & Chemical Corp., known as Sinopec, owns 30 per cent of Galp's Brazilian assets, including Carcara.

On Wednesday, Petrobras said it finished drilling the group's main well on the Carcara prospect in the Santos Basin south of Rio de Janeiro and that it had discovered a 471-metre column of high-quality oil in the prospect.

On Aug. 13 Reuters reported that Carcara was one of the most significant discoveries in the country's subsalt polygon, a region that contains most of Brazil's actual and expected future output.

The expected flow levels from Carcara wells, and there are expected to be several producing wells in the area, will likely be similar to those in the Lula Field, Mr. Michelucci said.

Lula, which is owned by Petrobras, Britain's BG Group PLC and Galp, is part of an eight billion barrel area that is one of the largest discoveries in the world in the past three decades. The area holds enough oil to supply all current needs in the United States for about 14 months.

Lula produced an average 97,000 boepd in October, according to Brazil's oil regulator the ANP, making it the seventh-largest producing area in the country. The largest amount of oil was produced by Lula's 7LL3DRJS well, which produced 36,025 barrels a day in the month.

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Drilling stopped in Carcara before reaching its planned depth of 7,000 metres below the seabed because of rising costs and increasing difficulty related to sub-sea rocks, Mr. Michelucci said.

The well cost more than $300-million to drill, QGEP said. The well on Carcara is now being temporarily closed as Petrobras, which operates the area, and its partners assess the drilling.

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