Equinor (NYSE: EQNR), ExxonMobil (NYSE: XOM), Petrogal Brasil, and Pré-sal Petróleo SA (PPSA) have decided to develop phase one of the Bacalhau field in the Brazilian pre-salt Santos area, Equinor revealed Tuesday.
The investment is approximately $8 billion, Equinor noted, adding that the development plan for the project was approved by the Brazilian National Agency of Petroleum, Natural Gas, and Biofuels (ANP) back in March. First oil at the field is planned in 2024, although Equinor warned that project plans may be adjusted in response to health and safety restrictions due the Covid-19 pandemic.
Development of the Bacalhau asset will include 19 subsea wells tied back to a floating production, storage, and offloading (FPSO) unit located at the field. This will be one of the largest FPSOs in Brazil with a production capacity of 220,000 barrels per day and two million barrels in storage capacity, Equinor highlighted. The stabilized oil will be offloaded to shuttle tankers and the gas from Phase 1 will be re-injected in the reservoir.
Significant efforts are said to have been made to reduce emissions from the production phase, including implementing a combined cycle gas turbine system to increase the energy efficiency of the power station. Lifetime average CO2 intensity is expected to be less than 9kg per barrel produced, which Equinor noted was significantly lower than the global average of 17kg per barrel.
“This is an exciting day,” Arne Sigve Nylund, Equinor’s executive vice president for projects, drilling, and procurement, said in a company statement. “Bacalhau is the first greenfield development by an international operator in the pre-salt area and will create great value for Brazil, Equinor ,and partners. Good cooperation with partners, Brazilian authorities, and suppliers has resulted in an investment decision for the Bacalhau field,” Nylund added.
“Bacalhau is a globally competitive project with a break even below $35 in a key energy region. Estimated recoverable reserves for the first phase are more than one billion barrels of oil,” the Equinor representative went on to say.
Juan Lessmann, the lead country manager for ExxonMobil in Brazil, said, “the development of the Bacalhau field is a strategic investment in our global portfolio and has the potential to bring high returns for ExxonMobil, our partners, and the Brazilian people”.
“This project has progressed due to the strong collaboration between ExxonMobil, Equinor, Petrogal, and the government,” Lessman added.
Thore Kristiansen, Galp’s upstream chief operating officer, said, “this project will significantly contribute to Galp’s continued competitive upstream growth”.
“The investment is a testament to Galp’s commitment to continue to grow in Brazil, and its success will have positive returns for all of Galp’s stakeholders in the country and beyond,” Kristiansen added.
Eduardo Gerk, PPSA’s president director, said, “the Bacalhau field is an accomplishment over high-complexity technical challenges, without losing track of the positive economic and social aspects”.
“The Bacalhau field represents the great benefit that foreign companies can bring to the development of the pre-salt and Brazil. PPSA feels honored with this highly cooperative partnership, which promises to generate excellent results for the country,” Gerk went on to say.
The Bacalhau field is situated across the BM-S-8 and Norte de Carcará licenses. Equinor holds a 40 percent operated interest in Bacalhau, with ExxonMobil also holding a 40 percent stake, and Petrogal Brasil holding a 20 percent interest.
To contact the author, email andreas.exarheas@rigzone.com
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