Brazil OG issue 1. - Brazil Oil And Gasbraziloilandgas.com/magazines/BOG_ISSUE_1/pdf/Brazil OG issue 1.pdf · Mauro Martins CEO Wajid Rasheed [email protected] Brazil Oil &

Oil

Brazil&

Gas

2006 – Issue 1

Ultra-deepfrontiers

Production

Completions

RigsPipelines

EnvironmentalProtection

Mature fields

Gas plays

Heavy oil technology

Drilling advances

Self-sufficiency

EP Rasheed PublicationsLondonEngland

Oil

Brazil&

Gas

3Brazil Oil and Gas Issue 1

Self-sufficiency in sightReaching self-sufficiencyCampos BasinSlender wellsRotary Steerable SystemsThe salt challengeGeophysical dataPetrobras InternationalThe road to recoverySubseaIntelligent WellsRefining E&P strategy

56911141617202628323436

Wajid RasheedGeorge Hawrylyshyn (Brazil)John Bradbury (Intl)JC Cunha (Technology)Mauro Martins

CEO Wajid [email protected]

Brazil Oil & GasLondonEnglandTel: (44) 1753 572257

Brazil Oil & Gasc/o EasylinePrado Junior 78Copacabana – RJTel: (55) 21 2275-5090

Ad SalesMonica Placido, [email protected]: (55) 21 92130629Ana Felix, [email protected]: (55) 21 97148690

EDITORS PUBLISHER

CONTENTS

4 Brazil Oil and Gas Issue 1

ARTISTSAlexandra BrunaNeuza MarcondesJair MendesLayout: Bob Roxburgh

Oil

Brazil&

Gas

INTRODUCTION5Brazil Oil and Gas Issue 1

During the last decade,Petrobras has pursued anaggressive E & P agenda

which has seen exploratory frontiersbeing opened, deepwater assetsmodularised and new platforms built.All told, Brazil’s dependence on oilimports for national demand fell from80% to 10% within two decades.

‘‘The P-50 will guarantee Brazil’sself-sufficiency in oil in 2006,’’Petrobras President Sergio Gabriellisaid at a ceremony at the MauáJurong shipyard just outside Rio deJaneiro.

As Guilherme Estrella, E&P Directorfor Petrobras, once said, “Self-suffi-ciency is an emblematic andinescapable goal. Wrapped up with it,is Brazil’s sense of self esteem. It willbe an historic milestone.” With today’shigh oil prices, self-sufficiency meanseconomic freedom. Coupled withBrazil’s successful financial manage-ment of its national economy, self-suf-ficiency carries economic benefits asBrazil will not need to buy approxi-mately 180,000 bopd on the interna-tional petroleum markets.

Self-sufficiency in sight

3000

2004

1.758

1.958

265

1.493

274

1.684

508

2.300

2.808

2005 2006 2010

2500

2000

1500

1000

500

Oil

Brazil’s forecast increase in national oil and gas production

+ 200 mil boe/day in 2005

7.6% per year

mil b

oe

/da

y

Se

lf-s

uff

icie

ncy

Gas

0

Beyond the numbers are the myriadoilworkers from both the servicecompanies and operators that makeproduction targets happen. In thisway, self-sufficiency is also a tributeto these people, Brazilian and visi-tors.

For me, it is both an honour andpleasure to have worked on thisinaugural issue of Brazil Oil & Gas.We are delighted to have Brazil’sveteran industry reporter GeorgeHawrylyshyn write for us. Georgewrites about the Campos Basin’sdomination of Brazil’s E & P scene.He also writes about Petrobras asthe big winner of the latest 7thlicensing round.

It is also an honour to have inter-viewed Joao Figueira, ExecutiveManager, Petrobras International

and Farid Shecaira, ManagerPRAVAP. Both these gentlemen talkexclusively to Brazil Oil & Gas aboutPetrobras activities.

It is a pleasure to note that Brazil Oil& Gas will be published biennially. Itwas originally meant to be an annualpublication, however due to theinterest shown we will publish twicea year.

Looking ahead to Issue 2 we haveinterviews with Marcelino Guedes,Pipelines and Terminals Director,and with Jose Luiz Marcusso,Executive Manager of the newlyformed Santos Basin Business Unit– based in Sao Paulo. There is alsoa special article on Petrobras E & PDirector Guilherme Estrella.

Kazuioshi Minami and EduardoFaria talk to Brazil Oil & Gas aboutPetrobras’ PROCAP 3000 and geo-physical programs, respectively.

These two technology special fea-tures are about technology thatdelivers value: increased recover-able reserves, lower finding anddevelopment costs, and building asafer and cleaner working environ-ment for generations to come.

Last but not least, I would like tothank everybody involved in publish-ing Brazil Oil & Gas, and Petrobraspress officers Glaucio Henmann andTaisa Fortes for their help.

Wajid Rasheed,

Publisher,

Brazil Oil & Gas.

1,790,000 is the magic number. That’s the bopd figure that Petrobras expects toreach when self-sufficiency occurs this year.

❛ With today’s high oilprices, self-sufficiencymeans economic freedom.❜

Source: Petrobras.

INTRODUCTION

In one way or another, the Brazilian oiland gas sector, which basically stillmeans Petrobras, has been on the fast

track for about half a century. It all startedwith the pro-monopoly “The Petroleum isOurs” movement and went through vari-ous phases, the latest being fast trackingthe long held nationalist dream of oil selfsufficiency.

Way back in the early 1950s, theBrazilians came out on the streets inmassive demonstrations pressing for thecreation of an oil monopoly and a statecontrolled oil company. In 1953,Petroleos Brasileiros SA- PETROBRASwas created as a state controlled compa-ny with the Constitutional mandate toadministrate the oil monopoly for theFederal Government, and assure thesupply of hydrocarbons for the populace.From the start the Brazilian state oil com-

pany was unique in as much as it wasestablished as a mixed capital companywith shares traded on the local StockMarkets. The distribution of oil productsand gas, was not monopolised and theexisting small, private, refineries wereallowed to continue operating.

It was back then that the concept of self-sufficiency in oil cropped up and althoughnot part of the main documents, it waswell understood that that was the objec-tive and dream of nationalists, a dreamthat would take more than 50 years to berealised. But it is finally happening and inearly 2006 Brazil’s domestic production isprogrammed to surpass the 2 M bopdmark, which will be more than consump-tion, therefore reaching technical self-suf-ficiency.

Starting from scratchOne of the arguments to establish anational oil company in Brazil was thatthe then ‘Seven Sisters’, among themShell and ESSO, had been in the countrysince the beginning of the century buthad concentrated on the no-risk distribu-tion sector and shown little interest inlooking for oil in the country.

Except for some isolated cases ofBrazilian nationals and a few foreigners,nothing much was being done in the wayof E&P here and Petrobras had to practi-cally start from scratch and was underpressure to do it fast. So the country’sfirst fast tracking operation was rushingto establish a company with staff that arepractically running a crash-course in thebasics of the oil industry. Transfer oftechnology is well established with thepriorities of scholarships for learningabout the oil industry abroad, andincreasing local technical and academicinstitutions.

Innovation and daringBy the ‘60s, aside from having gainedacademic knowledge and a decade offield experience (not only onshore butalso offshore, albeit in shallow waters)the Petrobras specialists had masteredthe basics of the oil industry and started

In the first six months of 2006,Petrobras’ petroleum production maymeet and even exceed consumption

levels in Brazil, with the prediction ofan annual average production of 1.91million barrels per day. This productionis considered sustainable as the com-pany has a portfolio of projects alreadyin development, which will increaseannual production to 2.3 million barrelsin 2010, without taking into accountfuture discoveries.

As the objective is not only toachieve this target, but also to maintainproduction growth levels, Petrobrashas planned for 36 big projects, amongthem:

In 2006■■ Platform P-34, with 60 thousand bar-rels/day, in the field of Jubarte; inCampos Basin.

■■ SSP-300, 20 thousand barrels/day,in the field of Piranema, in Sergipe.

■■ Golfinho Phase one, 100 thousandbarrels/day, in the field of Golfinho, inEspírito Santo Basin.

In 2007■■ RJS-409 Field of Espadarte, 100thousand barrels/day, in CamposBasin.

■■ Golfinho Phase two, 100 thousandbarrels/day, in the field of Golfinho, in

Espírito Santo Basin.

■■ Platform P-52, 180 thousand bar-rels/day, in the field of Roncador, inCampos Basin.


In 2008■■ Platform P-51, 180 thousand bar-rels/day, in the field of Marlim Sul, inCampos Basin.

■■ Platform P-53, 180 thousand bar-rels/day, in the field of Marlim Leste, inCampos Basin.

In 2009■■ Field of Frade, 100 thousand bar-rels/day, in Campos Basin.

■■ Golfinho (EES-156), production to bedefined, in Espírito Santo Basin.

In 2010■■ Golfinho FPSO 3, in definition phase

■■ Platform P-57, 180 thousand bar-rels/day, in the field of Jubarte, inCampos Basin.


■■ Field of Albacora, complementalphase, with the production to bedefined, in Campos Basin.

BBBB iiii gggg 3333 6666

Fast trackingself-sufficiency

By George Hawrylyshyn*

☛


innovating and being daring. It was thiscombination that led them to the first dis-covery in Campos and set the way forPetrobras to become a big player, indeeda pioneer and a major in the offshoreindustry. The first eight wells drilled in off-shore Campos came up dry andPetrobras executives didn’t want tospend any more money on an apparent-ly non-oil region. But one of the compa-ny geologists argued that as there wastime left in the contract, why not drill onelast well?

There was a big argument alleging the‘waste’ of money, but eventually the geol-ogist won, Petrobras drilled again andthat ‘last well’ discovered Garoupa, thefirst commercial field in what turned outto be the prolific Campos Oil Province.

Also daring was the solution adopted toface the First Oil Shock in the early 70s,when the price of crude doubled and thecountry was importing about 80% of itsdemand at the time.

The decision was daring as it placed thebets on offshore exploration – that wasbefore the discovery of Campos – and onfuel alcohol, unknown at the time butnow all the cars in Brazil use up to 20%of the home-grown ethanol.

Campos Basin Campos was discovered in ’74 at theGaroupa field, but soon afterwards therewere a series of other strikes, eventuallyincluding the giant deep water fields.Soon it had more oil than was imagined.

That was the time to switch fast track pri-orities to offshore production technology.The oil was there but the country could-n’t wait the usual four to five year periodto develop and bring in new oil. So itwas back to the necessity of invention.First it was the adaptation to local condi-tions of the North Sea ERS – EarlyRecovery System. That is, using a jack-up to produce newly discovered oil soon-er.

Eventually this led to producing from anexploratory well and in deeper waters theuse of the Floating Production Storage

and Offloading (FPSO) – which savedtime and money by being converted fromthe hulls of old Petrobras oil tankers –and eventually the first DynamicallyPositioning FPS – Floating ProductionSystems for ultra-deep waters. Inbetween were such innovations as re-usable wellheads, Wet and HorizontalChristmas Trees, diverless and wirelessinstallations to name a few.

These and other methods led Brazil onthe so-called ‘March to the Depths’ with aseries of ever deeper and ever biggerdiscoveries, all of which were leading theway for self-sufficiency.

As a consequence of these discoveries,mainly in Campos, Petrobras started set-ting a series of deepwater productionand other world records. Petrobras wasalso rewarded twice for its pioneeringefforts, with the industry’s most covetedprizes, the OTC TechnologicalDevelopment Award.

End of the monopolyHeeding to the ‘Winds of Change’ – aworld-wide trend for privatization – theBrazilian government ended thePetrobras monopoly in 1997, leaving thecompany with the areas it was producingor developing and retaining its mixedcapital status with the governmentremaining as the majority stock-holder.Other than that, Petrobras was given themandate to operate as a private compa-ny, including participation in the E&Pconcession bids on the same terms as allthe other bidders. That is, the sameterms but with an unmatched knowledgeof the geology operating methods in thecountry.

Petrobras carried out its instructions fromthe government so well, that some of theprivate companies are complaining thestate company is using the concessionbids to buy back much of the acreage itowned when it held the monopoly.Another complaint from the private sidecannot be blamed on the state company.By coincidence, the series of giant fielddiscoveries that Petrobras had in theearly 90s finished with the end of the

monopoly. And many of the discoveriesmade later were not only small but alsoof heavy oil.

Self-sufficiencyIn most countries oil self-sufficiency isconsidered something ‘nice’ if productionis rising and ‘bad’ if it’s falling.

In Brazil, where production is rising, selfsufficiency is a symbol of national prideespecially for politicians and oilmen.Petrobras is budgeting millions of dollarsto advertise the fact that sometime thisyear domestic production of oil will sur-pass demand. Although admitting thismight not last one year, Petrobras mar-keting people feel it is beneficial to spendthis money on advertising.

Officially, Petrobras calculates self-suffi-ciency is expected to be reached in thefirst half of 2006, probably in April.Company projections expect thatmonth’s production should reach a highof 1.90 mln bopd, while domestic con-sumption is expected to be 1.79 mlnbopd. But it will still take a few yearsbefore the surplus of domestic supplystabilizes, as according to governmentprojections, this year’s surplus will onlylast until October when consumption willreturn to surpass production.

But aside from its symbolic value, self-sufficiency on the way up is good for theeconomy and for the self-esteem of oil-men and politicians. But this raises thequestion of what to do with the extra oil?There is a nationalistic tendency arguingto save the extra oil in the reservoirs forfuture use, but foreign and privateBrazilian companies, as well as numer-ous Petrobras specialists, favour the ten-dency to pump, sell the surplus abroadand continue exploring, rather than sav-ing the surplus crude to assure futuredomestic demand.

Petrobras’ market value grew 70%to November 2005 when com-pared with 2004. It has consolidat-

ed its position as the 8th highest valuedcompany of the sector and the highestvalued in Latin America. This reflects itsexceptional operational, financial andmarket performance

Petrobras went up 68 positions inBusiness Week’s ranking. The magazineevaluates global companies according totheir market value, based on publiclyheld companies listed in the index ofStandard & Poor’s Global 1200.

According to the criterion of BusinessWeek, Petrobras went to 56th place inthe ranking, after considering its marketvalue in November 2005, which wasUS$ 72 billion, compared to November2004 when it was US$ 42 billion. Thisplace in the ranking shows the sustain-able advances of the company in all itsareas of performance in one year, inwhich its results were highly positive. Inthe activity of exploration and productionrecord levels of oil and natural gasextraction were registered, with the oper-ational start of the new P-43 and P-48platforms.

Records in the area of refining werealso achieved by maximizing the pro-cessing of national petroleum and qualityimprovement. Along with all oil compa-nies, Petrobras benefitted from interna-tionally high oil prices.

The result shows Petrobras’ com-mitment to increasing shareholdervalue while strengthening its role asan integrated energy company with astrong international presence and aleader in Latin America, while main-taining social and environmentalresponsibilities.

PPPPeeee tttt rrrroooobbbbrrrraaaassss aaaacccchhhh iiii eeeevvvveeeessss hhhh iiii gggghhhh mmmmaaaarrrrkkkkeeee tttt ggggrrrroooowwww tttt hhhh iiii nnnn ppppeeee tttt rrrroooo llll eeeeuuuummmm sssseeeecccc tttt oooorrrr

* George Hawrylyshyn is the Founderof BRASIL ENERGY and BRASILENERGIA



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Rio de Janeiro, Brazil – As on previ-ous occasions, Petrobras was thebig winner of the 7th Round of

Brazil’s E&P Concession Bids.

In October’s bids, Brazil’s state oil compa-ny picked-up an additional 96 blocks,operating independently or in partnershipwith others making up a total bonus ofUS$ 236 million.

They also made the highest bid for a sin-gle block, US$ 71 million, which Petrobras(60%), split with British Gas (40%). Thissum was paid for the Santos Basin, S-M-508 block, where the Brazilians, and theBritish, were betting on the very deep,sub-salt, frontier formations.

While Brazil’s national petroleum agency,ANP, called this round a “great success”,for Petrobras the annual bids havebecome something of a routine opportuni-ty to re-build its portfolio and regain someof the blocks it had before the end of its oilmonopoly in 1997, when the national oilcompany held all the sedimentary basinsin the country.

According to the ANP, this round talliedclose to half a billion US dollars in bonustotals, from the 251 blocks sold of the1,134 offered. The ANP says this is morethan in any of the previous rounds andthat the block sales success rate of 22%was a good result by offshore industryexpectations. The ANP was also excitedabout the fact that aside from the totalbonus earnings, of US$ 484 million, com-mitments for exploratory work in theblocks sold could amount close to US$ 2

billion, over the next few years.

The ANP, which is promoting the participa-tion of private Brazilian companies in thelocal oil business, had a double reason forsatisfaction; the increase of participation inthe bids by medium and small sizeBrazilian companies and a good turn-outfor the agency’s first attempt to auctionsmall marginal fields.

Small and medium-sized Brazilian bidderspicked up another 96 blocks, albeit muchsmaller and less costly areas than thoseacquired by Petrobras.

Marginal fieldsThe 7th Round also served to show howthe oil business is different in Brazil. Itintroduced bidding rounds for small andmostly non-producing fields, somethingpractically non-existent in Brazil, becausePetrobras – the long time sole operator –was seldom interested in these very smalloperations. Whereas the oil industry inNorth America started with marginaldeposits – often stripper wells – morethan a century ago, the local circum-stances are such that Brazil is only mov-ing into marginals now, half a century afterthe first commercial oil strike here. In thisround more than 100 small and medium-sized companies, many new to the oilbusiness, competed for the 17 marginalfields offered and bought up all but one ofthem.

A total of 114 blocks went to foreign com-panies, as operators or associates (notethe total number of blocks sold doesn’t

match the sum reported here becauseblocks with minority partners are countedmore than once):

Amerada Hess, BG, Devon, ENI,EnCana, Koch, Newfield, Shell, RepsolYPF, Statoil, and the recently createdsmall Canadian company BrazAlta werethe foreign companies that walked awaywith blocks. But there were some majorsthat participated in previous Brazilianrounds but did not take part this time.Exxon, BP, Total and Chevron wereabsent.

The most sought-after basin was Santos.The first very deep sub-salt probes arebeing made here, and the recent discov-ery of the huge Mexilhao gas field hasadded to its attraction.

ANP officials had promoted bids for spe-cially selected areas with gas prospects,and that worked. Not only in the region ofthe giant Mexilhao field in the SantosBasin but also elsewhere. This effortworked even though Brazil’s Gas Law hasnot been passed yet and there was con-cern that bidders would not want to investin a market that didn’t have well definedrules and regulations.

Another well disputed area was the surg-ing new oil province of Espirito SantoBasin, where Petrobras got three blocksand Shell got four.

The 1,134 blocks offered this time, includ-ed 625 offshore and 509 onshore, spreadacross 34 sectors, covering an area of397,600 sq.km.

CAMPOS BASIN

Campos Basin stilldominates

The Campos Basin continues todominate the Brazilian oil field,despite some highly promising

strikes in the Santos Basin – south ofCampos – and the Espirito Santo Basin– to the north.

Covering a total of about 100,000 sq.km,the Campos Sedimentary Basin has 43Exploration and Production (E&P) con-cessions being worked by nine oil com-panies, occupying about 20% of the totalarea. Production of oil now stands atabout 1.4 M barrels of oil per day,

almost all of it by Petrobras, and stillgrowing.

Summing up the reservoirs that havealready been discovered in the CamposBasin and some of the probablereserves to be discovered, Petrobrasestimates that Campos will continue tobe their leading oil province at leastthrough to 2015.

But the Campos’ heyday appears to beover, unless there is a new break-through, one of which could be the ultra-

deep, sub-salt oil formations being test-ed now, or striking more gas. From 1994to 2004, Petrobras drilled 225 explo-ration wells in the region, 90 of whichstruck oil. These probes resulted in thediscovery of the giant fields of Marlimand Roncador, as well as the promisingParque das Baleias area.

In those ten years, the proven reservesin Campos have almost tripled, from 3.7B boe in 1994 to 10.7 B boe in 2004.The equivalent production of oil barrelswent from 496,000 b/d to 1.203 M b/d.

Petrobras was the big winner in the 7th round as well

By George Hawrylyshyn

tions with the drillers after three calls forconventional bids had poor results: fewparticipants and very high prices.

The decision for direct negotiations wastaken in March and involved not only con-tracts expiring in 2005 but also thosematuring later. These longer terms gaveBrazil a competitive advantage over theshort time spot market rates more com-mon elsewhere, as well as the fact thatconcentrating units in Brazil spared thecost of frequent movement over long dis-tances.

Of the 24 rigs secured by Petrobras, 17are semis and 7 are drill ships, with theirwater depth drilling capacity ranging from600 m to 3,000 m, although only 6 havecapacity beyond 2,000 m. Most of thecontracts were renewals, but there were5 new rigs: Pride Portland, Pride Rio deJaneiro, Peregrine I, Noble TheraldMartin and Dave Beard, the latter underconstruction. The companies involved inthe deal were renowned internationalnames such as Transocean Pride, Nobleand Diamond, as well as the Braziliancompanies Petroserv, Queiroz Galvãoand Schahin Oil & Gas.

Petrobras’ initial slow reaction to spi-ralling day rates resulted in the failure torenew the charters for 4 deep-water rigs.Transocean’s, Legend and the SedcoExpress have already left the country andare operating abroad for BP, while theDeepwater Frontier and DeepwaterExpedition will leave the country by thefirst quarter of 2006.

Without these units, and having 2 semiswith 3,000 m capacity – the Paul Wolfand the Dave Beard – available only in2007 and 2008, Petrobras is reworking itsultra deep-water drilling program:rescheduling it to 2008 and giving priorityto shallower waters.

In the last part of 2005, day rates fordrilling rigs spiralled along with theprices of crude. But after being slow at

the start and losing 4 ultra-deep waterdrill ships, Petrobras learned fast andrapidly picked up 24 rigs, renewing its rigfleet at rates well below current marketvalues.

The package deal includes direct negoti-ations for new, long range - 2 to 5 year –charters, and renewal of the Petrobrasdrilling fleet. It is believed to be thelargest deal of this kind for the offshoresector and it has certainly been financial-ly beneficial for Brazil’s national oil com-pany. While some rigs are going for asmuch as US$ 405,000 per day, the high-est rate Petrobras paid was US$ 254,000per day. Indeed, only 2 of the rigs char-tered by Petrobras, — for Noble’s deep-water semis Paul Wolf and Dave Beard –surpassed US$ 200,000 per day, wellbelow going day rates elsewhere.

The Brazilians adapted direct negotia-

Petrobras getsdrilling rigscheaper

RIGS

❛ longer termsgave Brazil acompetitiveadvantage overthe short timespot market ratesmore commonelsewhere... ❜


By George Hawrylyshyn


Since 1970, the Campos Basin hasbeen something of a test groundfor new drilling and production

activities. During this time, vast amountsof information and know-how have beengenerated enabling the testing of prom-ising technologies without causing loss-es to the company or damage to theenvironment.

One such promising technology is the‘Slender well’, an integrated projectencompassing drilling, completion andworkover for wells in deep and ultra-deepwaters.

Reducing the drilling riser’s diameterand consequently rig deck load is themain goal of slimming down wells. Thismakes it possible for rigs with lowerdeck load capacity to operate in waterdepths greater than their original designand this has major benefits. For exampletime-consuming rig upgrades can beavoided. Also, more rigs that can work indeep and ultra-deep waters at a lowercost are made available. This meansthat second and third generation rigscan be used in markets that had previ-ously been restricted to fourth and fifthgeneration rigs.

Beyond improving rig availability, slen-der technology offers a host of otherpotential benefits. These are currentlybeing explored by Petrobras in order toreduce drilling, completion and workovercosts. In an integrated project that cov-ers well, rig and everything in between,Petrobras is investigating the use ofslender well configurations as well asslender equipment such as wellheads,risers, tubing hanger and the drill piperiser.

With this working philosophy, the firststep was to change the conventionalwell design (casing strings: 30” x 20” x13 3/8” x 9 5/8”) to the slender welldesign (casing strings: 30” x 13 3/8” x 95/8”).

A conventional well in the Campos Basincomprises four phases or casing strings:36” or 30” x 20” x 13 3/8” x 9 5/8” casing,

Campos Slender WellsDrilling and completing wells in ultra deep water using Slender Well technology

and in some cases a 7” liner can beused. This casing configuration hasbeen adopted since the first 30” casingwas jetted in 1993 in the Barracuda field.The conventional configuration wasalready an evolution in well design aspreviously the 46” or 42” casing usually12m to 14m in length was a structuralcasing string that was no longer used.

Petrobras engineer Luizao said:“Petrobras has a lot of experience in theCampos Basin, acquired from the devel-opment of several fields. This permittedus to understand a key parameter forwell design; pore-pressure profile.Accurate pore pressure profiles enabledthe concept of the slender well, whichmeant the removal of a casing string, inthis instance the 20”casing. Furthermore,it was possible to go deeper with the 133/8”casing safely and without the needto run the BOP stack. This depth is thesame or in some cases deeper than the

13 3/8”casing shoe of the conventionalwells. All this is a consequence of theknowledge of the pore pressure profile inthe Campos Basin. Therefore, it is veryimportant to point out that the applica-tion of this technology is recommendedfor known areas, rather than uncharac-terized exploratory areas.”

Offering different well configurationsdepending on the type of completionrequired, slender wells offer unprecen-dented integration between drilling andcompletions. Casing strings can beoffered as liners (or not) and the sealingbetween casing strings is guaranteed bythe cementing job or the cementing jobplus a wellhead pack off. This kind ofsealing has been extensively used in theCampos Basin and still provides excel-lent results today.

Luizao explains: “The slender well proj-ect has greatly improved the efficiencyof operations by reducing time. It fits theexploration goals, by providing fastanswers to Geological needs.Nowadays, the slender well is a suc-cess. Drilling and completing the wellusing three casing strings is a very com-mon way of meeting the objective in acost effective manner. Currently, slenderwells drilled in the Campos Basin havethree phases, these are Jetting the 36”or30” casing, and drilling with and withoutreturns.”

PHASE 01:36”/30” Jetting

Due to the soil profile of the CamposBasin, three joints of 30” casing are usu-ally enough to support the weight of the13 3/8” casing, which is the next casingstring. In some cases, it is necessary torun four or even five joints.

During this phase the Jet Cam Tool,developed together by Petrobras andanother service company allows us tosave considerable rig time since it per-mits drilling ahead after the jetting oper-ation. This saves time, which is alwayswelcome in deep and ultra-deepwaters.

PHASE 02: Drillingwithout returns

Drilling of the next phase begins soonafter the 30” casing has been jetted. Thedrilling BHA is made up with a 16” bit

By W. Rasheed

❛ Reducing the drilling riser’s diameterand consequently rig deck load is themain goal of slimming down wells. ❜

DRILLING

☛

Slender wellhead.

cult to evaluate wear in the 133/8”casingstring. However, if there is confidencethat the 133/8”casing has seal integrity,the 95/8” casing can be run as a liner.

The Slender well design does not fore-see the use of a 20” casing string. As aresult a stress joint was designed toenable the connection between the133/8” casing and the high-pressurehousing. This stress joint is welded tothe bottom part of the high pressurehousing utilizing a 133/8” BDS thread forthe casing connection. This stress jointallows ‘soft’ changes in diameter but

due to presence of the LWD, whichdoesn’t obtain good results in largerdiameter holes. On the other hand, thisdiameter can cause some problems dur-ing the 13 3/8”casing run. The bestoption focusing on landing and cement-ing the casing would be to use 17” bit todrill this phase.

The length of this phase varies from600m to 1200m, with the casing shoebeing positioned at almost the samedepth as in conventional wells. Thisphase is drilled faster since it uses eithera 16” or a 171/2” bit instead of a 26” drillbit. Additionally, drilling a well with asmaller diameter guarantees better well-bore stability.

After drilling this phase, the 133/8” casingis run coupled to the stress joint at thebottom of the 16” high-pressure housing.Following this the casing is cementedand the BOP is run.

PHASE 03: Drilling withreturns

The following phase is drilled with a121/4” bit. In this phase all the main andsecondary pay-zones will be drilled. Thewell is planned in such way that all themain targets are concentrated in thethird phase. This allows reduced drillingtime for the previous phase without com-promising operational safety.

The structural strength of the wellheadsystem is created by the united low andhigh-pressure housings and the structur-al casing, which, in this case, is the36”/30”casing. The loads generated bythe riser system, BOP and currents acton this wellhead system in the form ofbending moments, compressive axialloads and horizontal shear forces on thewellhead system. However, the axialresistance is provided by the 36”/30” and133/8” casing together with the cementbetween these casings. Therefore, it isconcluded that the 30”casing jettingoperation is vital for the wellhead systemstability.

As a premise it was assumed that theslender wellhead should permit drillingand workover operations using the 21”or the 185/8” standard riser and also the15” OD slender riser. Consequently theexternal shape of the high-pressurehousing was kept the same as the stan-dard 16” x 10 Ksi Petrobras wellheads.

This wellhead is designed to receive twocasing hangers: the 95/8” and the rarelyused 75/8”. In a standard slender well the95/8” casing hanger/casing is often runfor safety measures, because it is diffi-

❛ Another important point to beconsidered in this design is the effect ofcement levels relative to the mudline.❜

❛ The structural strength of the well-head system is created by the unitedlow and high-pressure housings andthe structural casing.❜


☛

avoids the build up of stress in a partic-ular area.

The stress joint design is criticalbecause large diameter changes occurand consequently induce high stresses.Additionally, as this stress joint must fitany kind of slender wellhead it was nec-essary for it to be compatible with stan-dard and pre-load high-pressure hous-ings. Analysis of the two housing modelsshowed that the first is less robust as thegaps that exist between housings over-load certain parts of the high-pressurehousing. The first design step was toevaluate the loads acting at the top ofthe wellhead. This was done by using in-house software ‘Overpull’ and ‘WH-Stiff’.The software uses environmental data,material characteristics and the BOPand flex-joint characteristics as inputdata.

With the resultant loads at the top of thewellhead a non-linear static analysis ofthe wellhead is performed. This analysistakes into account the non-linearity ofthe soil using the P-y, T-z and Q-ucurves as recommended by API guide-lines RP-2A. In this analysis the highpressure housing is considered as fixedto the low pressure housing. The lowerpart of the housing has a conical stressjoint with BDS (Buttress Double Seal)thread that will connect to the 13 3/8”casing string.

A finite element software programme isthen run to evaluate the performance ofthe stress joint by using the output datafrom the non-linear static analysis of thewellhead assembly. Another importantpoint to be considered in this design isthe effect of cement levels relative to themudline. Levels above or below themudline create different types of stress-es. Analysis shows that cement 5mbelow the mudline result in lower stress-es at the stress joint. At 10m thosestresses tend to stabilize, which is bene-ficial for the slender wellhead.

Another feature of this technology is the2500m-water depth Christmas Tree thathas been developed. This tree can berun with the Drill Pipe Riser and can be

worked-over from a rig using the SlenderRiser (15” OD x 14” ID).

Drilling in DP Unitsusing Surface Blow OutProtectors (BOP)

In 1998, based on Unocal’s experiencein Indonesia, Petrobras decided to studythe use of surface BOP in moored rigs.The study was conducted by a group ofPetrobras engineers together withStamark Offshore. The rig selected forthe studies was Petrobras P-XIII, a sub-mersible moored rig. The idea was toupgrade the rig for usage in 1800mwater depth. Additionally, the upgradewould enable drilling with a 13 3/8” riserwithout a sub-sea disconnect system butusing a 13 3/8” x 10000 psi surface BOP.The results of the analysis showed thatthe idea is feasible but the project wasinterrupted because a different task wasassigned to the rig.

The need for a safer, more efficent andfaster ultra deepwater exploration pro-gram has revived the upgrade program.The same reasons apply; to avoid run-ning traditional and complex BOP, whichnormally causes a lot of downtime and tobroaden the use of upgraded third gener-ation rigs in a market hitherto exclusivelythe preserve of fourth and fifth generationrigs.

In order to achieve this goal, Petrobrashas started a series of studies such as: 1)risk assessment, 2) riser analysis, 3) riserand connector selection, 4) contingencyplans, 5) standard drilling proceduresadjustments and modifications and 6) adefinition of sub-sea shut off system toimprove safety issues.

Benefits of slenderwells

Luizao said: “The first Slender well drilledin the Marlim field, March 1998 took therecord for Campos Basin drilling, taking atotal of 7.6 days from the jetting to thefinal depth. Such performance was duenot only to the slender well design –which was the main factor – but also to

the excellent performance of the team onthe planning and execution of the welloperations. Ever since that first slenderwell, high performance has been a con-stant in the Campos Basin. Up to now198 slender wells have been drilled, 62exploratory and 136 development. Fromthose 82 were vertical, 79 directional and37 horizontal. Those wells are inRoncador (25), Barracuda (8), EastAlbacora (5), Caratinga (11), Espadarte(6), Marimbá (6), South Marlim (27) andMarlim (48) in water ranging from 692mto 2777m. All these slender wells demon-strated a considerable efficiency com-pared to the conventional wells (casings30” x 20” x 13 3/8” x 9 5/8”).

It was in the Marlim field that the slenderdrilling proved its value. Four slenderwells have been ranked among the fivebest in the field. Not only does the recordfor the fastest drilled well in the CamposBasin go to a slender well (it was drilled ina total of 6.9 days from jetting to finaldepth), the same well also holds therecord for unproductive time: only twohours were lost.

This comparative analysis between con-ventional and slender wells consideredproductive versus non-productive time.Productive time was defined as drillingand non-productive as tripping, cement-ing, logging, etc.

Additionally, the time taken to completeall four casing strings of the conventionalwell and the time taken to complete thethree strings of the Slender wells werenoted. This was done because the slen-der drilling concept eliminates a casingstring but reaches the same depth as theconventional.

Sixty-five of the best conventionallydrilled wells in the Marlim field were com-pared to slender wells. The conclusionwas overwhelmingly convincing; slenderwells reduced drilling times by approxi-mately 17%.

It is worth highlighting that slender welltechnology is well suited for character-ized areas since well control and safetycan be planned on offset wells.

❛ It was in the Marlim field that the slenderdrilling proved its value. Four slender wellshave been ranked among the five best in thefield.❜

❛ The conclusion was overwhelmingly convinc-ing; slender wells reduced drilling times byapproximately 17%.❜



ROTARY STEERABLE SYSTEMS

Operators have long sought thequality and performance associat-ed with rotary drilling.

Consequently, ‘rotating’ is a preferredmode of drilling in many applications. Bycombining rotary drilling with fixed andvariable gauge stabilizers oil companieswere able to realise high quality wellboresand high penetration rates. But thesewere limited to two dimensional direction-al well plans as bent housing motors and‘sliding’ were still required for azimuthalcorrections. A decade ago, after muchresearch and funding, 3D rotary steerablesystems (RSS) were commercialized bythe major directional companies.However, it is only recently that gains inRSS reliability have really made the tech-nology ‘game-changing’.

Guy Arrington serves as Global BusinessManager – Drilling Technology,Schlumberger and Peter Edghill servesas Sales & Marketing Manager, LatinAmerica South, Schlumberger. Theyspoke to Brazil Oil and Gas about howtheir company’s RSS technologies arecutting costs and creating ‘newfound’value to oil company portfolios.

Arrington said: “We can provide for ‘push’and ‘point’ the bit applications. It’s just thenature of the steering system thatchanges. What’s important is that, in all ofour rotary steerable systems, everythingrotates all of the time, and we offer theonly fully-rotating systems on the market.Our RSS achieved cumulative drilling of7+ million feet in 2005 alone. It is trulyversatile – and can be run in geosteering

applications with PDC bits and in abra-sive formations-where it can be run withPDC or impregnated bits. We have toolsavailable for hole sizes from 53/4” to 22”.While a 31/8” tool is being developed forTTRD and other slimhole applications.Several models are available today.”

‘3 R’s – Rotation,Reliability, ROP’Arrington said: “Our RSS family offerssolid reliability – with mean-time-between-failure that is approachingdownhole motors. Motors are the industrybenchmark. So we have comparable per-formance as well as the benefits of a sys-tem that is rotating 100% of the time. Fullrotation is appealing as you reducetorque and drag while improving weighttransfer to the bit. What this means isimproved ROP and hole quality. This rota-tional aspect also provides our RSS fam-ily with an ability to be run with bothunderreamers and bicentre bits.”

Bicentre synergiesIncreasingly, operators seek to under-ream. Whether driven by cementing toler-ances, ECD improvements, pore pres-sure fracture gradients, productionincreases, swelling shales/salts or settingsand screens, underreaming is soughtafter at all stages of field development.Steering that is largely independent ofborehole contact allows the use of bicen-ter bits to increase hole gauge.Directional drilling is possible becausethe system does not rely on gauge hole topush the eccentric reamer against the for-mation when steering.

Edghill said: “The ability to open the holewhile rotary steering provides advan-tages in extended-reach and deepwaterapplications where directional drillingtechniques are often required. In a recentrun for a GOM operator, the tool helpeddrill a high-quality borehole and this pro-vided good LWD data. On previous wells,several runs were required to get compa-rable LWD data. The tool enabled timesavings and provided for good steerabili-ty with an 81/2” to 97/8” bicentre bit.” Thisapplication has been proven to reducerisk and cost in diverse well constructionapplications and therefore offers a viablealternative to underreamers.

Open hole sidetrackingEdghill said: “Because it does not pushagainst the borehole to build angle, ourRSS system is very effective for steeringin soft formations and where overgaugeor washed-out hole is present. Hole angleis built with minimal dependence on theborehole for deflection. In a recent appli-cation, the tool improved drilling efficien-cy resulting in a 52% reduction in totalwell costs. It also reduced trip time whiledrilling the longest well in the field. Forthe first time the sandstone section wasdrilled (13,689 ft) in one run”.

“The above 52% reduction in costsworked out as a $1.5 million reduction intotal well costs. This convinced a MiddleEast operator to replace conventionalmotor technology throughout the compa-ny's ongoing field program. During the

RSS hit the right noteThis article looks at the rotary steerable systems of Schlumberger, currently the indus-try’s top ‘DD, MWD and LWD’ company as ranked by analysts ‘Spears andAssociates’.

By W. Rasheed

RRRR uuuu gggg gggg eeee dddd dddd eeee ssss iiii gggg nnnnThe internal steering mechanism limits tool exposure to extreme borehole condi-tions. As a result, the RSS system is much less susceptible to wear in sandstonesand other highly abrasive environments. Tool life is also enhanced by stationaryinternal seals that are not exposed to fluids containing abrasive cuttings. Thesteering system operates equally well in all types of fluid environments.

To further enhance tool capabilities in extreme environments, this system isdesigned to operate in wellbore temperatures as high as 302ºF [150ºC].

☛

Hole quality can be improved with 100%rotating RSS. See fig opposite.


second phase of the multiwell program,the operator needed increased capabilityto overcome obstacles in the laterallyvariable sandstone reservoir. Nearly 90%of these wells require openhole side-tracks for geological realignment. Theavailable seismic data defined the heavi-ly faulted area”.

Maintaining verticalityEdghill said: “Our RSS for vertical appli-cations automatically maintains a well-bore’s verticality and eliminates thepotential for costly correction runs. Itrequires minimal or no rig-site supervi-sion or interaction and is an optimaldrilling solution. It can use surface ordownhole power, or both and minimizesthe potential for lost-in-hole.

“It also provides effective hole cleaningbecause everything rotates at drill-stringrpm. It permits reaming, back-reamingand shoe drillout and can be run inde-pendently of MWD systems, if required.It’s rewarding to note the surprise in peo-ple’s eyes when they see the surveyscome back. We routinely get surveysshowing 0.5° – 0.2° verticality with thistool”.

Enhanced drilling Edghill said: “This RSS model offers extratorque capacity which allows for a higherweight on bit for increased ROP and cost-effective drilling. Compared with conven-tional RSS, the technology gives youhigher revolutions per minute, resulting inlonger runs. An integrated power sectionincreases bit rpm while decreasing drill-string rotation. This reduces stick-slip andother damaging vibration modes commonto conventional rotary drilling. All avail-able energy is used to drill the hole opti-mally.

“Casing wear and drillstring fatigue arereduced in sections with high doglegseverity, lessening the chance of drill-string or casing failure. All external parts

rotate at drillstring speed, reducing drag.The rotation also helps clean and condi-tion the hole, lowering the risk of differen-tial or mechanical sticking. On a rig thatlacks the power to rotate the drillstringduring conventional directional drilling,the system increases the rig's operatingenvelope, allowing RSS techniques toimprove directional performance”.

Harsh ApplicationEdghill said: “We have proved drillingapplications in some very harsh environ-ments. Our RSS was designed to berugged and is successful where external-ly steered mechanisms have reachedtheir performance limits. Because it has atotally enclosed internal steering mecha-nism and field-proven electronics, the toolis extremely reliable in abrasive, hot-holeand high-shock applications.

“For example, for a N Sea operator weset a daily footage record (2619ft), had afactor 4 reduction in drilling vibration andeliminated the need for a wiper trip.Because the tool has a reduced depend-

ence on wellbore contact for steering, it isideal for openhole sidetracking in over-gauge hole or soft formations. It can alsobe run with bicentre bits for directionaldrilling with minimal wellbore depend-ence.”

Edghill said: “The durability of the Xceedsystem is a major advantage in high-shock-load applications such as drillingthrough laminated hard rock formations.The system shares a common electronicarchitecture with the SchlumbergerPowerPulse* MWD telemetry system,which has an operating life in excess of a1000 hours. Together this system pro-vides real-time toolface, inclination andazimuth data. It also delivers high DLS ininterbedded or consolidated formationsthat are equivalent to a steerable motor”.

Cost-savingsArrington said: “Onshore we are deliver-ing value. Clearly, we have to look atapplications from a commercial perspec-tive. We deployed tools where they gen-erate a return, the research and develop-ment involved with this technology hasmeant there is a large paid in cost basewhich has kept us out of certain marketsegments. However, RSS are increasing-ly coming online in more and more landapplications. Even with lower rig costs,the improvements in wellbore quality anddirectional profiles puts greater value intoclient’s portfolios”.

Edghill added: “For sure, our RSS haveproved themselves in complex well pathsand high cost environments with themajors. But smaller operators in differentparts of the world are making prettyimpressive savings. That makes the useof RSS more compelling in low costdrilling environments such as onshore ormature fields.”

TTTThhhheeee iiii mmmm ppppoooorrrr tttt aaaannnncccceeee oooo ffff rrrroooo tttt aaaa tttt iiii nnnngggg1111 0000 0000 %%%% oooo ffff tttt hhhh eeee tttt iiii mmmm eeeeA fully rotating design provides valuable benefits:

■ The flow of drilled cuttings past the bottomhole assembly (BHA) is enhancedbecause annular bottlenecks are not created in the wellbore.

■ Efficient cuttings removal increases penetration rates because cuttings are notbeing reground while drilling.

■ Penetration rates are also improved because there are no stationary compo-nents to create friction; this improves drilling efficiency and reduces BHA ‘anchor-ing’ in the hole.

■ Mechanical and differential sticking of the drillstring are reduced because thereare no stationary components contacting the casing, whipstock, or borehole.There is also a reduced chance for the BHA to pack off.

References: SPE 85285, 71396, 92623Acknowledgements; the author wouldlike to acknowledge Mary Jo Caliandroof Schlumberger.

RSS provides smoother wellbores.

Several deepwater blocks in theGOM and West Africa (CongoBasin) are characterized by salt

provinces. For example, sub-saltwells have been drilled with totaldepths exceeding 30,000 ft and saltsections exceeding 8,000 ft.Production companies such asAnadarko, BP and Chevron who holdsub-salt acreage face a combinationof imaging and deepwater drillingproblems. Other operators in deepwa-ter areas, such as Brazil, which hashad relatively limited salt challengesto date, may also need sub-saltstrategies as exploration reaches saltprovinces.

In some cases, spanning over half awell-bore’s true vertical depth, saltcan present sizeable difficulties.Where salt is just ‘salt’ things are rel-atively simple. But where salt sectionsare heterogenous containing halite,anhydrite, sedimentary channels,flows or rubble zones things becomecomplex. This makes the mappingand imaging of salt a difficult processwith subsurface phenomena oftengoing unseen. Seismic data cannotalways represent salt flows or chan-nels with many anomalies only trulycharacterized through drilling.

Anomalies - represented or not - cre-ate drilling problems that range fromloss scenarios with pore pressureregressions below salt, loss of direc-tional control, stuck-pipe due to saltclosure and vibration induced byalternating salt/sediment bedding.

Hole stability can be affected byactive salt tectonics. Intermediatesections can be subjected to geo-haz-ards such as faulting and fluid seep-age. Salt closure increases the loadson the casing and its cement as bothmust be able to withstand forcesapplied by the salt as it expands radi-ally and pinches the well.Simultaneously drilling and casing thewell may be a good way of overcom-ing this.

Maintaining directional control in saltis not straightforward as there is a

The salt challengePrevalent worldwide, massive salt sections add to wellconstruction challenges.

DRILLING

tendency for well-bore deviation.Certain salts require higher weight-on-bit to drill as compared with sediments.Consequently, the higher weight-on-bit,the greater the tendency for the bottomhole assembly (BHA) to build inclina-tion. In an attempt to counter the buildtendency, weight-on-bit may bereduced causing penetration rates todrop. A successful approach has beena rotary steerable assembly and abicentre bit. This type of BHA can max-imize ROP in the salt, minimise vibra-tions due to inter-bedded formations,control wellbore direction and maintaincertainty of enlarged hole. It can alsohelp maintain gauge hole which is asimportant as high penetration rates.

Costly deep-water rig rates mean thatoperators are right to require high per-formance levels. Consequently, morerigorous QA/QC standards aredemanded of downhole tools to permitsections to be drilled in single runs athigh penetration rates.

Salt sections have higher fracture gra-dients (when compared with sedimentslocated at the same depth) enablinglonger sections and reduced well-con-trol problems associated with perme-able formations. However, predictingpore pressure and fracture gradient insediments below the salt is tricky.While a regression below the salt willoften dictate casing depth.

It is known that synthetic oil-based-mud (SOBM) can be the most effectivesalt drilling fluids as they avoid bore-hole enlargement and well-bore insta-bility. Additionally, SOBM permit higherpenetration rates and lubricity whichcan reduce levels of overall mechanicalvibration. If total losses are expected,then a salt saturated water-base-mud(WBM) can be used to minimize bore-hole instability. Salt precipitates canresult in mud related problems by clog-ging surface lines and pumps. Assolids precipitate fluid densities dropwhich can create potential well-pres-

sure control problems.

Mud densities also change when saltformations are drilled. At higher tem-peratures, more salt becomes part ofthe mud, but on surfaces where lowertemperatures exist, excess salts canprecipitate. Another problem is the lim-ited solubility of salt when another saltis present. This can lead to increasedconcentrations of undesirable salts,precipitates and ultimately alteredchemical compositions of drilling fluidunable to serve their original applica-tion.

Unsaturated seawater pills have beenshown to improve penetration rate in

the salt saturated water-base fluid with-out leading to excessive washout.Pumping these pills in differing vol-umes, with and without polymers whileusing an acoustic caliper to monitorhole gauge can generate valuabledata. This can be used to refine subse-quent salt drilling techniques.

Drilling performance in salt can beimproved by minimizing polymer addi-tives to a salt saturated WBM as thishelps minimize available "free water" inthe salt saturated system.

Performance can also be improved byusing formation inhibitors prior todrilling the rubble zone and allowingsalt concentrations to drop to 20%,where the salt zone has been casedand gas hydrate inhibition does notrequire higher concentrations of salt.

Although many risks associated withsalt can be reduced through pre-drillseismic, look-a-head tools and real-time pore pressure profiling, there arestill plenty of ‘unknowns’ to keep every-one excited.

The author acknowledges SPE papers71363, 16688, 74546

❛ Where salt sections are heteroge-nous ... things become complex. ❜


By W. Rasheed

Datakey tocuttingrisk Seafloor under investigation in the Campos Basin.

❛ In water depths beyond the base ofthe slope...active salt tectonics playan important role in shaping theseafloor ❜


GEOPHYSICAL

By acquiring and interpreting geot-echnical and oceanographic datamuch risk can be removed from

exploration activities. Geophysical dataplays a crucial part in supplying deep-water asset teams in the Campos, Santosand Espírito Santo basins with seabedand water column information. This infor-mation is necessary for well constructionand production activities. Petrobrasresearch projects encompass a widerange of E & P activities including geo-physical data.

One of these projects has been namedas the ‘slope and ultra-deep waterseabed geo-hazard’. It involves the acqui-sition, processing and interpretation ofdetailed regional geophysical and seabedsample data (piston cores). This data isacquired in order to identify and charac-terize potential geo-hazards. The data-base for this project includes exploratoryseismic 3-D, regional surface and highresolution deep-towed side-scan sonar,swath and multibeam bathymetry, subbot-tom profiler seismic and seabed samples.Exploratory seismic 3-D will be used forseafloor rendering, amplitude extractionand analysis of underlying structureswhile seafloor texture will be mappedusing side-scan sonar imagery. Pistoncores will be utilized to ‘ground-truth’ geo-physical interpretation and date geologi-cal events.

In the Campos Basin, where the conti-nental slope was regionally assessed forgeohazards during Procap 1000 and2000, the studies will concentrate onmapping salt structures. In water depthsbeyond the base of the slope (>2000mwater depths) active salt tectonics play animportant role in shaping the seafloor. Inthis location, structural styles, regionalsalt trends, salt induced topography andgradients, salt related controls on sedi-mentation and instabilities and fluid seep-age will be investigated. Salt induced ver-

tical seafloor displacement rates will betentatively modeled. In the other basins,continental slope areas will be the focusof geohazard assessment. Fault move-ment, mass wasting activity, fluid seep-age and oceanic current-induced seabederosion are the main issues.

The aim of characterizing and analyzingslope stability & seabed sediments is toidentify the geotechnical properties ofsoils. This has been achieved throughgeotechnical surveys and the integrationof geological data. Modeling this datawill help analyze aspects of slope stabili-ty. This project is being carried out in theRoncador, Albacora Leste, Marlim Sul,Marlim Leste and Jubarte/Cachalotedeepwater oilfields in the Campos andEspírito Santo basins. Water depths inthese basins can reach 2100m and oil-fields are mainly located on the lower

continental slope where seafloor gradi-ents are relatively high (>10 degrees)and evidence of mass wasting has beenobserved. Soil shear-strength profileswill be used for optimizing mooring,manifold installation and jetting.Geotechnical and geological data will beintegrated and serve as input for slopestability modeling with the purpose ofdefining safety factors.

During the generation of ‘oceanographicdata for production’ project oceanograph-ic data will be collected from specificareas of the Santos, Campos andEspírito Santo basins in water depths upto 3,500 metres. This is a multifacetedproject that will supply asset teams withvital information. This information willcover the retrieval of existing oceano-graphic data from other organizations,multi-sensor mooring deployment, seasurface temperature (SST) and sea sur-face height (SSH) monitoring satelliteimages, collection/interpretation of high-frequency radar (CODAR) data, oceancirculation numerical modeling, analysisof extreme currents and databaseinput/integration. The three multi-sensormoorings will include current meters andtemperature sensors and will operate fora full year in each location.

Initially, two pairs of antennas will beinstalled in the Campos basin for the col-lection of high-frequency radar (CODAR)data with the purpose of measuring thesea surface currents in real time. Thisinformation, along with pre-existing data,will validate oceanic circulation numericalmodels. As a result, extreme currents willbe analyzed to identify instabilities of theBrazilian currents in South Eastern Brazil.All this information will be incorporatedinto an in-house database.




PETROBRAS INTERNATIONAL

Today, Petrobras already has a pres-ence in more than 15 countries,among them: Iran, Libya, Tanzania,

Angola, Nigeria, United States, Mexico,Venezuela, Colombia and almost everycountry in South America. In 1999,Petrobras’ strategic plan increased pro-duction targets from 60,000 to 300,000boe for 2005. “Our plan has an emphasison three geographic areas. These areSouth America, the GOM and WestAfrica. These represent new explorationfrontiers. Our vocation is to find petrole-um. But we must also maximise thevalue of our portfolio. For example, asproduction falls in certain areas, we haveresponded by pruning. In the UK, werealigned our portfolio by selling off UKassets. These assets required high levelsof attention but the reward in terms ofproduction was not proportional,”Figueira said.

Figueira said: “Know-how and technolo-gies enable us to accelerate production.And we of course, have exported ourdeepwater expertise from Brazil to otherdeepwater provinces.

“For example, the PROFEX systemallows Petrobras to effectively modelgeological basins, this stimulates geolo-gists to look for new exploratory areas.PROFEX has been very useful in deep-water asset development. While theacquisition of Perez Companc was amatch of exploration knowledge withmature asset know-how. Perez Compancmade its living by picking up marginal orolder fields and applying secondary andtertiary recovery techniques. This skillsset came with the Perez Companc staffand perfectly matched knowledge inPetrobras own mature field technologyprogram - PRAVAP. (See Interview withPRAVAP Manager Farid Shecaira p26)

Figueira said: “In Argentina, Petrobras’operations mirror those of Brazil albeiton a smaller scale. Argentina contributes40% of Petrobras’ total production. Werecognize that we operate in privilegedareas. These international locationsshow our strong presence in the fron-tiers of pure exploration. Looking forwardto the future, we are positioning our-selves to book more reserves by explor-ing new frontiers.”

Exploration andProductionIn Argentina, Petrobras participates in fourdifferent blocks, with three still beingexplored. The Aguarague Block is theonly one in production. With the purchaseof Petrolera Santa Fé, which was con-trolled by the Devon Energy Corporationand Perez Companc until 2002, thePetrobras’ Exploitation & Production port-folio in Argentina now has 16 exploratoryblocks with good exploration potential.After the acquisition of Perez Companc,which was subsequently named‘Petrobras Energia S.A.’, the oil and gasproduction of the Company jumped from20,000 bopd in the country in 2002 to91,441 daily barrels.

Refining, transporta-tion and commerciali-sationFigueira said: “Petrobras and Repsol-YPF concluded negotiations that relateto the terms of the agreement for theexchange of assets in December2001. Repsol-YPF transferred 99.5%of the EG3 oil company to Petrobras,which was the owner of a refinery andnearly 700 petrol stations among self-owned and franchised ones.

With the end of the acquisitionprocess of Perez Companc in 2003,the Refinement and Petrochemicalssegment counted thereafter withanother five industrial and manufactur-ing units for rubber, liquid fertilizers,and polypropylenes, among otherpetrochemical inputs. Petrobras oper-ates three refineries in Argentina:Ricardo Eliçabe in Bahía Blanca, arefinery in San Lorenzo, and theRefinería Dei Norte, all of themacquired by the purchase of the stock-holder control of Perez Companc.”

Gas and EnergyFigueira said: “In this segment,Petrobras has a participation of 34%in the capital of the company Mega,whose total investment was of US$715 million. Our business is formed bya natural gas separating unit in LomaLa Lata – a 600 kilometer long gaspipeline – and a fractionation unit inBahía Blanca, apart from tank fillingand shipping of products for exporta-tion. Another substantial Petrobrascompany in Argentina isTransportadora de Gas dei Sur [sic](TGS), with 7.4 thousand kilometres ofgas pipelines and a capacity to trans-port 62 daily cubic metres of gas. Thecompany still has a natural gas pro-cessing plant in Bahía Blanca with acapacity to process 42 million dailycubic metres of gas. Petrobras’ elec-tricity assets can be found all alongthe productive chain in Argentina. Byparticipating in three power plants andone gas thermoelectric power plant,Petrobras is responsible for 6.5% ofthe energy production in the country.”

The worldJoao Figueira, Executive Manager, PetrobrasInternational talks exclusively to Brazil Oil and Gasabout Petrobras’ operations abroad.

ARGENTINA

☛

By W. Rasheed


Exploration andProduction In Bolivia, Petrobras participates in theSan Alberto, San Antonio, Monteagudo,Ingre and Rio Hondo blocks. In the gasfields of San Alberto and San Antonio,where the Company is the operator, thegreatest natural gas reserves in thecountry were discovered. The oil andnatural gas production is currentlyaround 54 thousand daily barrels of oil.In August 2001, Petrobras acquired theIrenda block. For the area that is favor-able to oil exploration, the block pres-ents tested reserves equivalent to 800million barrels of oil.

Refinement,transportation andcommercialisation

Figueira said: “The Empresa Bolivianade Refinación (EBR) – which Petrobrascontrolled after the acquisition of PerezCompanc – is the owner of theGualberto Villaroel (Cochabamba) andGuillermo Elder Bell (Santa Cruz)refineries. Those units process a com-

bined average of 32,600 bopd, withsales of 31,690 bopd. EBR’s sales oper-ations of basic lubricants to markets inParaguay, Peru and Chile are also sig-nificant, as well as gasoline exportationsto Paraguay and Brazil, apart form theexchange of oils with EG3 in Argentina.”

Gas and EnergyFigueira said: “Regarding gas trans-portation, the gas pipeline from Yacuíbato Rio Grande stands out. Operated byTransierra S.A., a company in whichPetrobras has participations, it allowsthe production outflow from San Albertoand Sábalo fields.

It is within these fields that Petrobrashas a participation in two gas processingplants with the capacity to process 13million cubic metres of gas each.

Constructed by Petrobras, the SanMarcos gas pipeline will transport thenecessary gas to supply the thermoelec-tric plant in Puerto Suárez, under con-struction at the moment, and with esti-mated power of 86 MWe.”

In Angola, Petrobras participates in twomarine blocks. In Block 2, Petrobras ispartnered by Texaco (operator),Sonangol and TotalFinaElf, it has 20 pro-duction fields. In Block 34, which is stillbeing explored, Petrobras’s partners areSonangol (20%), Norsk Hydro (30%),Phillips (20%) and Shell with 15%.Currently, the production in Angola isapproximately 4,000 bopd.

of Petrobras

BOLIVIA

ANGOLA

COLUMBIA

ECUADOR

US ANDMEXICO

❛ Our vocation is to find petroleum.But we must also maximize the valueof our portfolio. ❜

Figueira said: “In Colombia, Petrobrasoperates 13 blocks and participates in15 of them in land, whereby eight of

them are under production phase. Withreserves of around 120 million daily bar-rels and under Petrobras’ operation, theGuando field declared its tradeability.Currently, this field presents an initialproduction of 10,000 bopd forecast toreach of 30,000 bopd in 2006. The cur-rent production in the country is equiva-lent to 16,000 bopd.” Petrobras also haslinks with the Tayrona Block which cov-ers an offshore area of 45,000 sq.km.Water depth reaches 3,000 metres andthe block offers great potential. It isoperated by Petrobras (40%) in partner-ship with ExxonMobil (40%) andEcopetrol (20%)

In Ecuador, Petrobras operates throughPetrobras Energía SA. It has two blockswhereby one is for production and theother for exploitation. In 2003, four wellswere drilled for development in Block 18and two for exploitation in Block 31, bothoil discoverers [sic]. Current productionis equivalent to 11,152 daily barrels ofoil.

Figueira said: “In the USA, Petrobrasassets have grown through organicgrowth and through the bit. We havemade good use of our deepwater knowl-edge gained in Brazil by applying this toGOM offshore acreage.”

Petrobras has links with 277 offshoreblocks in the US Water of the Gulf ofMexico. Of these 80 are shelf blocks

☛

– Joao Figueira, Executive Manager, Petrobras International


PETROBRAS INTERNATIONAL while 197 are deepwater blocks.

Cottonwood is a well operated byPetrobras in the Garden Banks 244block (GB 244-3). The well was drilled toa total vertical depth of 6,037m(19,807ft) and high quality gas bearingreservoirs with a total thickness ofaround 40m (130ft) were encountered.

Petrobras has an 80% participating inter-est and is the operator of the block.Mariner Energy, Inc. holds the remain-ing interest.

It also participates in the discovery of theCascade prospect via the Cascade-1well. The oil and gas production in theU.S.A. is approximately 4,000 boe. InMéxico, Petrobras has a market pres-ence via the Master Service Contracts,these comprise 2 blocks in the Burgosbasin.”

Petrobras’ operations in Peru began in2003 after the control acquisition of theArgentinean company Perez Companc,having thus participation in two blocks.One block is under operation and theother under exploitation. The company’scurrent product in Peru is equivalent to14,000 boe.

Petrobras has begun severalinitiatives with Petroleos deVenezuela S.A. (PDVSA).

Among these are a ‘50/50’arrangement for the design of arefinery in Pernambuco ( Brazil)able to process 200,000 bopd.Refining will be schematized tomaximize the production of dieseloil and petroleum liquefied gas.

In the United States, PetrobrasAmerica presented the highestnumber of winning bids (53, witha total value of US$ 30.1 million)in the auction promoted by theNorth-American regulatory body;in western Africa, it obtainedoperatorship of an explanatoryblock in Nigerian waters.

Petrobras America also discov-ered high quality gas in its firstoperated well in the deep watersof the Gulf of Mexico (US Waters).The total investment to be allocat-ed by the Company in Gulf ofMexico (US Waters), is expectedto reach US$ 1.5 billion from2006-2010.

Petrobras is gearing up to achieveaverage production of 3.4 mln boeper day, in Brazil and abroad, in2010.

Figueira said: “This is another country inwhich Petrobras was able to operateafter the acquisition of Perez Companc.It has six blocks, four of which are pro-ducing and two of which are still beingexplored. After Argentina, Venezuela isPetrobras International’s second largestoperating unit, with production averaging46,804 bopd. ”

Figueira said: “In Nigeria, Petrobras par-ticipates in the OPL 216 exploratoryblock, whose partners are Chevron-Texaco and the Nigerian companyFamfa. The block is located in the NigerDelta where the Agbami field was dis-covered, which is under the elaborationphase of development studies. Thereserves of this field could reach 750million barrels. A participation in the OPL246 block was acquired in 1999, whosepartners are Total and the Nigerian com-pany Sapetro. Also located in the NigerDelta, the Akpo field was discovered inthis block, whose reserves nearly reach450 million barrels, and also with devel-opment plans under elaboration.

Regarding the discoveries in the Agbamiand Akpo fields, the forecast is thatNigeria will produce nearly 55 thousanddaily barrels of oil by 2008.

In 2005 and currently without production,Petrobras’ investments in this countrywill be of US$ 350 million.”

PERU

CHINA, IRANANDTANZANIAVENEZUELA

NIGERIA

LIBYA

Petrobras recently signed agreements tooperate in these countries and the com-pany is in the early stages of planning.

Figueira said: “In Tanzania, Petrobraswas awarded blocks 5 and 6 covering anarea of 10,000 km2. Here Petrobras isconducting geological modeling as wehave 100% operator ownership. InTasmania we had been studying gasplays since 2000 which had been neg-lected due to the search for oil. Wefound indications of oil nearMadagascar. This led us to further study.Considering tectonic plate movementswe can see Madagascar was next toTanzania and by coupling this informa-tion with the little seismic we held, weare able to locate a new petroleumprovince. Our vocation is to find petrole-um.”

In Iran, the Company is getting ready tobegin exploration activities in the Tusanblock which covers approximately 6,000km2 in Iranian waters of the PersianGulf.”

Petrobras formalised an agreement withthe state-owned National Oil Corporationof Libya which ensures oil and gasexploration rights in the Libyan sector ofthe Mediterranean Sea. Four blockscomprise the area and it offers good dis-covery perspectives. The signature ofthe agreement signals Petrobras’ returnto exploration activities in the country,

50-50refinerydesign

❛ The forecast is that Nigeria willproduce nearly 55,000 barrels of oil perday by 2008.❜

❛ Petrobras has links with 277 marineblocks in the Gulf of Mexico ...mostare in deep and ultra-deep waters.❜


PETROBRAS INTERNATIONAL

Petrobras’ wide-ranging interna-tional operations complement itsBrazilian activities as it seeks to

lead the oil, natural gas, and derivativesmarkets in Latin America. After a spateof recent acquisitions, the companyestablished a strong presence in thepetrochemicals area.

Beyond Latin America, the main focusremains on West Africa and the Gulf ofMexico.

In 2006 Petrobras expects to invest atotal of US$ 2.05 billion inetrnationally,of which 46% will be in Latin America,40% in West of Africa and 14% in theU.S.

These investments are distributed asfollows: US$ 1.6 billion in Explorationand Production, US$ 0.16 billion inRefining, Transport and Trading, US$0.08 billion in Gas and Energy, US$0.04 billion in Distribution and US$ 0.03billion in Petrochemicals.

Performance improvements and adiversified international portfolio areseen as the key to achieving sustain-ability for Petrobras.

Today, Petrobras already has a pres-ence in more than 15 countries, amongthem: Iran, Libya, Tanzania, Angola,Nigeria, United States, Mexico,

Venezuela, Colombia and almost everycountry in South America.

While the company is consolidating it’sposition as a leading energy provider inthe Southern Cone in the areas of Gasand Energy.

In 2006, investments are being made inthe areas of health, environment andoperational security, in project integra-tion, in information technology andtelecommunication and building brandvalue.

URUGUAY

where it was present during the 70sand the beginning of the 90s.

Figueira said: “Petrobras’s activitiesin Uruguay started with the acquisi-tion of shareholder control ofConecta SA, the Uruguan conces-sionaire for natural gas distribution.The company operates a pipelinenetwork of 300 kilometres and hasexclusive supply rights to small andmedium sized consumers inland.Currently, Conecta has 4,200 clientsof which 4,100 live in private resi-dences”.

Investments AbroadAccording to Petrobras’ BusinessPlan, US$ 7.1 billion will be investedin the international area until 2010.Nearly 80% of this amount is con-centrated in Exploration andProduction projects. Latin Americareceives approximately 40% of thisinvestment, closely followed by WestAfrica, mainly Nigeria, and the Gulfof Mexico, where Petrobras hadexploration success.

Expectations regarding the develop-ment of large discoveries are that oiland gas production will grow to12.1% a year, and tripling by 2010.

Currently, the volume produced byPetrobras abroad is 263, 000 boe, anamount which is expected increaseto 545,000 in 2010. Internationalreserves amount to 1.9 billion bar-rels.

PPPP eeee tttt rrrroooobbbbrrrraaaassss IIII nnnn tttt eeeerrrrnnnnaaaa tttt iiii oooonnnnaaaa llll ::::aaaa cccc oooo mmmm pppp aaaa nnnn yyyy pppp rrrr oooo ffff iiii llll eeee

PETROBRAS RESERVES (at 31/12/04)

Bolivia 681 36%

Argentina 393 21%

Venezuela 281 15%

Nigeria 237 13%

Peru 105 6%

Ecuador 85 5%

Columbia 42 2%

EUA 36 2%

Angola 12 1%

TOTAL 1.872

The people behind Trinidad andTobago’s Oil & Gas Industry

Meet them in this great supplement in theMarch/April Issue of... AD SALESAnita Bhola, [email protected] Mungal, 680-3717Ana Felix, [email protected]

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❛ The goals of the PRAVAP program,are to improve recovery factor – usingimaging as a way of identifyingremaining oil pools and improving theefficiency of water injection ❜

❛ We handle today an average waterinjection volume of 2 million barrels perday ❜

MATURE FIELDS

The road to recovery

PRAVAP has grown immenselysince its early days. Until 1999,PRAVAP was concerned with terti-

ary or enhanced oil recovery techniquesand mostly onshore locations.

Since 1999 and the gradual move tomaturity of offshore assets such asEnchova, Namorado, Cherne, Bonito,Congro, Carapeba, Vermelho and Viola,most of them in shallow waters; PRAVAPhas shifted focus to offshore applications.The program also widened to include anytechnology that could improve recovery.

Petrobras’ technology development fallsinto four main programs: PROCAP,PROPES, and PRAVAP, PRODUT. Underthe PRAVAP umbrella today’s 9 majorprograms range from Enhanced OilRecovery to water Management toIntelligent Wells. Eight of these programsare under way and one being initiated.

Shecaira said: “The question of when anasset becomes mature is complex. Thisis because for offshore fields such asMarlim Sul and Roncador, Petrobras hashad to employ a modular approach to life-cycle management. As modules aredeveloped and in time become mature,

there can be several parts of a singleasset that are mature while others are stillbeing explored. Reaching maturity arethe deepwater (800-1200m) giantsAlbacora and Marlim fields. Marlim,whose production begun in the nineties,has an oil whose API varies from 19 to21.”

More important than a exact definition ofwhich field is mature or not, is to consid-er that some aspects of reservoir maturi-ty, such as increased water production,are common to fields who enter maturityand yet more relevant in heavy oil fields,as these tend to produce more water andtherefore water management has to beconsidered very early on.

The goals of the PRAVAP program, are,therefore, to improve recovery factor –using imaging as a way of identifyingremaining oil pools and improving the effi-ciency of water injection; and to mitigatethe water associated problems, such assouring and scaling, thus decreasing thelifting costs of old fields.

Water management One of the main programs is water man-agement. Besides the mitigation of prob-lems, this program is concerned with theincrease of the recovery factor, which isachieved with actions such as improving

the areal sweep through correct evalua-tion of fracture direction under injection.

Petrobras is shifting from water injectionto water re-injection, with the means ofcorrectly managing water consideringenvironmental needs. To ensure smoothtransition from lab technology to fieldapplication, Petrobras runs pilot pro-grams. For example, currently a pilotwater re-injection program is being initiat-ed in Marlim. Pargo and Carapeba havea similar pilot under way. Here old water(from the reservoir) is re-injected to main-tain reservoir pressures.

According to Shecaira, the volumesinvolved in water management are huge.“To get an idea of the volumes manipulat-ed; we handle today an average waterinjection volume of 2 million barrels perday and half of it is produced.”

Shecaira said: “We also plan to constructa prototype system for ‘raw’ water injec-tion. This system is placed over theseabed and is used to capture and filterwater prior to injection. It has a goodapplication on mature fields or fieldswhose small platforms are often spacelimited”.

A decade after the North Sea has had to

By W. Rasheed

Petrobras’s advanced oil recovery program was formed in 1993. It is growing inimportance as greater numbers of assets pass into maturity having produced morethan 50% of recoverable reserves. Program leader Farid Shecaira talks to Brazil Oiland Gas about Petrobras brownfield programs.

☛

Seismic sections with different process-ing workflow.


❛ Petrobras has a ‘4D- room’ wheregeologists and engineers canvisualise geological phenomena.❜

❛ Onshore fieldshave seen goodresults fromEOR, with 20,000barrels a daybeing produceddue to cyclic orcontinuous steaminjection. ❜

come to terms with souring, Petrobras toohas had to implement Sour Gas and H2SManagement strategies. The HSE impli-cations of water injection were wellunderstood as injection had been startedas early as 1988 in the Namorado field,Offshore Campos Basin. Souring was nota problem at the beginning as expected,but for in the Marlim field, where waterinjection begun in 1994, a H2S break-through occurred in 2003.

“We were very quick to learn how to injectnitrate to mitigate the problem and to sim-ulate the reservoir behavior of H2S gen-eration processes to define, for the fieldsunder development, which strategy toadopt.”. The approach depends on theforecast of how much H2S is involvedand when it is being produced.

According to Shecaira, “We can decidewhat is the solution, if any is required. Ifnone or very low H2S volumes areexpected – there is no need to act; ifthere are medium levels, we may selectmetallurgical improvements; also sul-phate removal for scaling treatment maymitigate some of the souring problems. Iflevels are high we must inject nitrates. Totest the effectiveness of nitrate injectionwe have two filed pilots one re-injectingwater and the other injecting sea water,both using nitrate”.

This project is being developed in con-junction with service and research com-panies. OilPlus and Aquateam, for exam-ple, are performing laboratory tests tohelp to determine the simulation parame-ters of H2S generation in the reservoir.

Offshore operations have also beenresearching solutions to salt and scaleproblems. This can occur in perforations,tubings, subsurface and surface equip-ment.

Shecaira said: “Remote operations havebeen used successfully to perform inter-ventions such as well cleaning andsqueezing of scale inhibitors into the for-mation. This has been done in the Marlincomplex and also the Linguado field.Satellite wells using wet xmas trees areemployed in all Brazilian deepwaterfields, and with remote handling we avoidincurring high rig costs for intervention.The problems of metallurgy and anyeffects on subsea installations are care-fully considered”.

GeosciencesPetrobras has a dual geoscience pro-grams of Seismic for reservoir character-ization and also 3D geological modeling

Shecaira said: “Seismic for reservoircharacterisation is a main issue. Anacquisition project started in 2005 withthe objective of acquiring base 4-D time-lapse data of the whole Marlim Complex(Marlim, Marlim Sul and Marlim Lestefields). We hope it will give new insightswhich will direct our infill drilling programbeginning in 2006 and extending to 2008.These infill wells will be drilled to produceremaining oil”.

The Multi-component 3D/4C acquisitionprogram for Roncador field last year hasnow been processed to give definition ofthe internal heterogeneity of Roncadorreservoirs – this is an area of approx. 30sq km. This is a pilot project which wasconducted in 1,700m sea water depth.

Interpretation is made by geophysicistsand geologists assisted by service com-panies. Petrobras has a ‘4D- room’ where

geologists and engineers can visualizegeological phenomena.

Shecaira said: “As far as the 3D geologi-cal modeling project is concerned,Petrobras do not expect record break-throughs; the idea is to provide Petrobraswith state of the art technology for Non-conventional reservoirs, sealing faults,real time modeling modification and con-ventional logging. Also the modelingplays a crucial part in understanding andreducing uncertainties in geological mod-eling- it considers how wrong images canbe and whether estimated volumesmaybe higher or lower. It is very usefulfrom that perspective.”

Regarding the depositional hetero-geneities for Brazilian reservoirs, thismodeling reveals such things as thedepositional features of turbidites andreservoir geometry. Knowledge of thedepositional environment can helpexplain key reservoir characteristics suchas gross size and volumes, channels”.

Onshore fieldsIf water injection is the only method envi-sioned for the nest few years, this is notthe only option in onshore fields. Onshorefields have seen good results from EOR,with 20,000 barrels a day being produceddue to cyclic or continuous steam injec-tion. Applications in the Fazenda Alegre,Espirito Santo basin, have seen produc-tion rates improve in horizontal wells dueto the introduction of thermal recoverymethods.

Several research projects are testing the-ories and feasibility of in-situ combustion.Shecaira says: “Petrobras is also consid-ering variations of in situ combustion andsteam injection. The old vertical injec-tor–vertical producer scheme is beingsubstituted by innovative geometries, forexample, a vertical well to inject and hor-izontal to produce. Another alternative isto associate steam with solvents. Thistechnology was recently applied in a fieldin the Espírito Santo basin to mobilise oilwhich had not responded to steam injec-tion alone.”

Another front is Microbial EOR. Microbialapplications in the Sergipe field, NorthEastern Brazil is based on water and bac-teria. First, the water and bacteria ispumped down which is followed by nutri-ents. The bacteria develop a biomassthat clogs the porous medium and subse-quently increases viscosity of water andnew pathways will divert flow therebyincreasing production.

Shecaira said: “The use of chemicals tocontrol water is another area of interest.Water shutoff control in more than 200wells has been achieved with the injec-tion of a patented polymer – SELEPOL –a relative permeability modifier. Severalformulations were attempted, the morerecent is based on tiny pieces ofhydrophilic gel”.

☛

Reservoir geophysical acquisition trends.

“There have been several offshore appli-cations but the results were not as goodas onshore applications; today, we areusing the 4th generation of this technolo-gy.”

Drilling in carbonates or tight sands isanother area of interest. The stimulationtechnology plays a central role. Therehave been 5 fractures in a weel drilled inthe Enchova field, a shallow water, lowpermeability, light oil bearing carbonate.A new exploratory approach main bringinto focus a new family of reservoirs ofthis kind, previously intended to be mar-ginal in Brazil.

New projects have also come intoPRAVAP. The Intelligent fields initiativewhich is a functioning program hasmoved to PRAVAP from PROCAP. It’smost important pilot application has beenin the Carmopolis field, Sergipe Basin.Here there have been a pilot with 7 wells– 6 production and 1 injection. 4 wellswere installed with fibre optic temperatureand pressure sensors. At 4 points in thewell, one can shut and open flow valves.This system was 100% developed in con-junction the with the Catholic University(PUC).

“The novel gas management program inPRAVAP is designed to characterize gasreservoirs, principally for the tight sand-stone Mexilhao field, in the Santos off-shore basin. The development of aprovince of producing gas at the Santosbasin, south of Campos, was recentlyannouced by the company. The project isfocused on stimulating flow in low perme-ability porous media. Mexilhao is stillbeing studied by engineering and mayprobably receive one platform althoughthe project is very much at an incipientstage,” Shecaira said.

In the end, all fields become mature oneday so PRAVAP’s technology develop-ment will continue for many years tocome.


SUBSEA

For a company with such a long his-tory of subsea completion produc-tion systems, the constant develop-

ment of new subsea equipment is a mustin order to meet new water depth chal-lenges while keeping costs low.

The main purpose of this systemic projectis to extend the use of existing technolo-gy and to develop new concepts of sub-sea equipment in order to:

■ Produce and support the next phasesof Marlim Sul and Roncador, MarlimLeste and Albacora Leste, all of which arein water depths greater than 1,000m andpresent different fluid characteristics andreservoirs;

■ Make production feasible from new dis-coveries in water depths up to 3,000m;

■ Reduce Capital Expenditures in pro-duction developments in water depthsbeyond 1,000m.

One of the major technological bottle-necks associated with ultra-deepwatersubsea equipment are the installationloads and very expensive day rates forvessels.

In a conventional subsea production sys-tem there is a wet christmas tree pipelineconnection system, and in some cases,manifolds. Petrobras has started work ona research project that has been subdivided between horizontal wet christmastree for use at 2,500m water depth andthe subsea pipeline connection systemfor use in water depths greater than3,000m. Both sub-projects have nowbeen concluded with some of the mainresults presented here.

Horizontal WetChristmas Tree 2,500mAfter Horizontal Wet Christmas Trees hadbeen designed and proven for use up to2,500m water depth, their usage wasthen focused on application in waterdepths reaching 3,000m.

Subsea Flowline Connection System3,000:

This development involved upgrading theoriginal Vertical Connection System for1,000m water depth.

Due to the heavy pipeline loads involvedin ultra-deepwater installations, the multi-bore philosophy used in the 1,000mwater depth design had to be changed toa single bore. Although this decreasesthe operational loads, it increases thesize and weight of subsea equipmentessentially the manifold and wet christ-mas tree).

Studies have shown that water depthincreases the dynamic amplification andmotion of the Vertical ConnectionModule. As a result, ultra-deepwateroperations necessitate heave compensa-tion systems in order to minimize the riskof damage due to water depth effects onvertical motion and to increase opera-tional efficiency.

In 2000, some offshore tests were per-formed using a passive heave compen-sation system. These tests have shownthat it is feasible to extend the originalconcept for usage in 3,000m water depthrange.

Three further sub-projects are continuing.These are described below:

■ Completion Riser 3000m;

■ Subsea Equipment Installation ByCable in 3,000m Water depth;

■ Water Injection Wet Christmas Tree tobe installed by a pipe-laying vessel.

Completion Riser 3000mUndoubtedly ultra-deepwater operationsare always associated with very expen-sive rigs and high flow rate subsea wells.This means workover riser efficiency andthe need for subsequent interventionsplay an important role in reducing bothcapital and operational expenditures. Forinstance, conventional workover riserrunning methods mean that 10 days maybe required to deploy a subsea tree andtubing hanger in water depths of 3000 m.

Petrobrassubsea

Relative permeability curves before andafter SELEPOL treatment.

The road torecovery

☛


SUBSEA

Accordingly, the workover riser for 3000metres should be devised in such a waythat it make completions feasible at3000m water depth in a most efficient andreliable manner.

Petrobras has been using the so-called‘Drill-Pipe-Riser’ to perform completionsand workovers at water depths reaching2000 m. Although far more efficient thanthe conventional completion riser, opera-tional experience showed that it was wor-thimproving some components. Theweak point is the control umbilical andrelated equipment such us hang-offequipment and clamps. These elementshad shown problems that were deemedto be of critical importance in 3000 mwater depth.

Control umbilicals require careful handling,particularly during the tubing hanger modewhen the hanger has to be deployedinside the marine riser. This significantlydelays deployment time and poses the riskof dropping clamps inside the well, whichcan lead to lengthy and complicated fish-ing operations.

Another relevant point is linked to the factthat the Drill Pipe Riser utilizes an electromultiplexed control system, which requiresstrict control of fluid cleanliness levels.This may be difficult to achieve when per-forming work-overs in old Christmas trees.

Overcoming these problems was amongthe key requirements for the developmentof the work-over Riser for use in 3000mwater depth. Another challenging objectiveof this project is devising a work-over sys-tem, which is also competitive in shallowerwater depths, as, for the moment, thereare no Brazilians oil fields located in waterdepths beyond 2200 m.

Every new development brings associatedproblems, which are not easy to predict. Inorder to minimize technological risks, ithas been decided to divide the Riser proj-ect into two phases. The first, the so-calledproject definition phase, was recently con-cluded and was meant to investigate allpossible options, select the best one anddeliver a Technical Specification.

The selected concept includes lots of newideas and state-of-the-art technology thatoffers real potential to increase the effi-ciency of work-overs and completions, notjust in ultra deepwaters but in shallowerwaters too.

Subsea EquipmentInstallation via Cable in3,000m Water depthThe purpose of this project is to developtechnology that is suitable for the deploy-ment of heavy subsea hardware (up to200 ton) in 3000m water depths. The ideais use a more cost effective means ascompared to conventional wisdom whichis typically associated with the utilization ofa new deepwater rig.

Consequently, a new method was devel-oped and successfully employed on in mid2002. In this successful field application a175-metric ton subsea gas lift manifold(MSGL) was landed at 1885 metres (6184ft) water depth in the Roncador field. Inspite of utilizing a drilling rig with a nominallimitation of 1000 metres water depth (dueto its marine riser system), such a proce-dure allowed the MSGL installation at1885 metres water depth. It is recognizedthat depths beyond this could be reached.

As axial resonance was likely to occur at acertain manifold depth, it was necessary toreplace the rigid hang off with a complianthang off on the semi-submersible side.This was accomplished by activating boththe drilling riser tensioning system and thedrill string compensator.

This unique procedure utilized by the oilindustry proved to be more cost effectivewhen compared to the costs associatedwith the utilization of a new deepwater rigcapable of operating in similar waterdepths. Moreover, the scarcity of drillingrigs with ultra-deepwater capability actsagainst their employment in activities

other than drilling and completion.Conversely, the availability and relativelow cost of conventional rigs warrant theirchoice as the preferred alternative forsuch operations.

Water Injection WetChristmas Tree to beinstalled by pipe layingvesselThis sub-project was approved at the endof 2002, but has not yet started. Thevision is to design a Water Injection WetChristmas Tree that can be installed by apipe-laying vessel. This in turn will reducethe cost of the installation procedure andavoid the need for a deepwater rig tocomplete installation.

Ultra-deepwater ExportRisers, Flowlines andControl Umbilicals Petrobras is focussing on riser verificationthat are independent of the floating unitsystem, especially for use in water depthin 3000 m. Therefore, the technical feasi-bility of alternative risers that are proposedin-house (e.g. subsurface buoy risers) orthose recently developed worldwide (e.g.FSHR, riser tower, and pipe-in-pipe riser)is being investigated under the R&D pro-gram Riser and Flowline System andInstallation Method for usage in 3000mwater depth. Within the scope of this pro-gram, studies are being conducted inorder to verify possible riser catenary con-figurations for SCR or flexible risers forultra deepwater. Also, installation meth-ods, criteria, and equipment (vessels) arefocused under this program. At the end ofthe program, Petrobras intends to have arange of risers, flowlines, and controlumbilicals that could be applicable forultra-deepwater. The program will concen-trate on local and global fatigue analysis.

equipment forultra-deepwater

❛ Every new development bringsassociated problems, which are noteasy to predict.❜


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INTELLIGENT WELLS

Offshore drilling is often complex,costly and requires highly qualifieddrilling staff. Today, much impor-

tance is placed on optimizing drilling per-formance while maintaining safety stan-dards. Over the past two decades, techno-logical advances in Directional Drilling,Measurement-While Drilling (MWD) andLogging While Drilling (LWD) Systems andthe development of drilling capabilities fordeep and ultra-deep water show howmuch progress has been made in petrole-um exploration.

This article outlines a data collection sys-tem based on mud-logging technology.Often, mud-logging technology does notcollect large amounts of data. However,much valuable information is not beingused effectively. The main goal of the pro-posed system is to take advantage ofpotential valid information contained in thedatabase, which is not being completelyused.

Potentially, the proposed methodology hastwo applications. The first is related to per-formance analysis and investigation ofnon-scheduled events. In this sense, thetool could carry out further analyses of thetime spent on drilling each well in a field,and to determine how much time a givenphase of drilling took as a fraction of totaloperational time. The second is related tothe implementation of a computer systemto produce an on-line report of the execut-ed stages in the rig, and this report wouldpresent the precise time measurements asthe mud-logging data.

Similar initiatives for the development ofautomated supervising systems in otherfields were observed for mining engineer-ing problems. The system was developedat Unicamp, in the Lab of ArtificialIntelligence Applied to Petroleum (LIAP).The LIAP team has been working over thepast few years to develop intelligent andautomated systems for the oil and gasindustry.

Mud-logging SystemDuring drilling operation many mechanicaland hydraulic parameters are measuredand monitored and many systems worktogether on a rig to accomplish drillingtasks. Mud-logging is one of these sys-

tems, and it is used to measure and mon-itor mechanical and geological parame-ters.

The use of mud-logging systems wasintroduced in Brazil in the 1970s. At thattime, only a few parameters were moni-tored. Since the 70s, with advances ininstrumentation, the number of measuredparameters has increased and the use ofmud-logging systems has become com-mon practice.

Deep and ultra-deep water drilling alsocontributed to the progress of mud-loggingtechniques in Brazil. Deep and ultra-deepwater environments require very accurate-ly controlled drilling operations. Any failureor negligence may cause human injuryand economic losses. To control process-es accurately, enhanced mud-logging wasrequired.

Mud-logging systems have two distinctdimensions, the first one is responsible forcollecting and analyzing formation sam-ples (shale-shaker samples), and the sec-ond one is responsible for measuring andmonitoring mechanical parameters relatedto the drilling operation. Considering onlythe second dimension, the mud-loggingsystem could be characterized as a com-plete instrumentation system.

Generally, mud-logging systems rely on awide range of sensors distributed amongstrig systems. One important characteristicof this technique is that there is no sensorinside the well, and that measurementsare made on the rig. The data collected bythe sensors is then sent to a central com-puter system, where the data is processedand displayed in real time through screensinstalled in the mud-logging cabin and inthe company-man’s office. Parameters arevisible on display devices and the systemallows different parameters to be selectedand presented numerically or graphically.

During drilling, an operator will observeparameters for any abnormalities. If anobserved parameter presents unusual

behavior, the operator immediately com-municates this to the driller who will carryout certain procedures to solve the prob-lem. Actually, the system allows the pro-gramming of alarms that will sound in themud-logging cabin, alerting the mud-log-ger that the value of the observed param-eter is outside of the programmed range.

The number of observed parameters mayvary according to a particular characteris-tic of the drilling operation. The most com-mon measured parameters are: WellDepth (Depth), True Vertical Depth (TVD),Bit Depth, Rate of Penetration (ROP),Hook Height, Weight on Hook (WOH),Weight on Bit (WOB), Vertical RigDisplacement (Heave), Torque, Drillstringrotation per minute (RPM), Mud PitVolume, Pump Pressure, Choke LinePressure, Pump Strokes per minute(SPM), Mud Flow, Total Gas, GasConcentration Distribution, H2S concen-tration, Mud Weight in/out, Drilling FluidResistivity, Drilling Fluid Temperature,Flow Line, LAG Time, and Stand Length.

It is noticed that only some of the listedparameters are really measured usingsensor devices. Some of them are esti-mated from measured parameters. TheWOB, for instance, is an estimated param-eter. It is calculated using the WOH (ameasured parameter) and the weight ofdrillstring elements.

Figure 1 (page 33) shows the sensor thatmeasures the hook height. In this figure,the hook height is being measured throughthe drawworks revolution. It can benoticed, using Fig. 1, that there is morethan one sensor device installed. It hasoccurred in this specific case because,besides the mud-logging sensor, there isalso the rig and the MWD sensors.

Figure 2 presents the sensor for hookweight measurements. In the presentedsituation the weight is being measured bystrain gauges installed in the deadline. Asmentioned before, this measurement isutilized to calculate the WOB.

Figure 3 presents a sensor installed closeto the mud pump piston. It measures thenumber of strokes in a time unit. The mudflow rate is calculated using the number ofstrokes, the geometry of the pump cham-ber, and the pump efficiency. Actually thereis more than one pump operating at thesame time, and the total mud flow rate isobtained from the summation of eachpump’s individual flow rate of.

Automating mud loggingdata fordrilling

Authors: This article was based on workconducted by Rogério Martins Tavares,Ricardo Pelaquim Mendes and CelsoKazuyuki Morooka University ofCampinas, São Paulo and João CarlosRibeiro Plácido of Petrobras.

☛


INTELLIGENT WELLS

Figure 4 presents the choke line pressuresensor. This sensor device is installed inthe choke manifold at the rig floor.

Early kick detection is a major function ofthe mud-logging system and is based onobservation of mud pit volume, mudweight, and shale density. The mud-log-ging data can also be used to monitor for-mation pore pressure and formation frac-ture gradient. The formation pore pressurecan be estimated using correlations thatinvolve drilling parameters like Weight onBit (WOB), Rate of Penetration (ROP),Mud Flow, etc.

The mud-logging monitoring services aregenerally provided by a specialized com-pany. At the end of a drilling operation, thecompany makes a report relating occur-rences associated to the completed oper-ation. During the drilling parameters moni-toring, a huge amount of data is usuallygenerated. Due to difficulties of data stor-age, these data are summarized intosmaller files. The common practice is toreduce the sampling frequency of themeasurement from second basis tominute. If it solves the problem of file sizes,on the other hand it represents the loss ofa great amount of information. There aresome events that may occur and last onlyfew seconds, like the drag occurrence intripping out. When the data is summarizedthe information about the drag occurrencecould be lost.

Another important question related tomud-logging system is the redundancy ofmeasured parameters. Besides the hookheight, others parameters have been usu-ally measured by more than one instru-mentation system. It is common to find rigswhere the same parameter is being meas-ured by the mud-logging company and bythe rig system itself. And it is not rare toobserve cases where the measurementstaken do not show the same absolutevalue. This behavior has raised discus-sions about the future of mud-logging sys-tem.

Classifying IndividualDrilling StagesDrilling is not a continuous process. Onanalysis it is noted that drilling is asequence of discrete events. Theseevents are referred to as ‘drilling operationstages’.

Six basics stages associated to the drillingoperation were identified to build the pro-posed classification system. Table 1 pres-ents a brief description of each consideredstage and the labels adopted.

Description of drillingstagesThe six stages described in the tableabove represent a first effort to individual-ize the basic components of a drilling oper-

ation. The stages were detailed consider-ing the drilling phases with mud return tothe surface. The drilling technology con-sidered was drilling using mud motor andbent housing. This classification may notbe satisfactory for the initial drilling phasesand for special operations, like fishing. Inthe same way, if other drilling technologiesare considered, small adjustments in thestages will be required. For instance, usingrotary steerable systems, it doesn’t makesense to distinguish between rotary drillingand oriented drilling stages, becausethese systems are supposed to drill all thetime using drillstring rotation.

Architecture of theClassification SystemIn order to identify a given drilling stage inexecution, the system needs some of theinformation monitored by the mud-loggingsystem. This work suggests the use of: BitDepth, Weight on Hook – WOH, StandPipe Pressure – SPP and DrillstringRotation – RPM.

After reading the information; the data areinterpreted according to a set of pre-estab-lished rules. As result, the system willassociate an operation stage to each setof data according to the rules.

The classification obtained using the sys-tem could be used to automatically gener-ate a logging of the executed stages.

Mode LabelDrilling Operation Stages

RD

Rotatingmode

Rotary drilling: In this stage occurs the drilling itself; the bit reallyadvances, increasing the well depth. The drillstring is rotating and there ismud circulation. The drillstring is not anchored in the rotary table causing ahigh hook weight level.

Reaming: In this stage despite the high hook weight level, the mud circula-tion and the drillstring rotation, the bit does not advance, increasing thefinal well depth. In this situation there is a reaming of an already drilled wellsection.

Drilling (Sliding Drilling): In this stage, the bit really advances, increasingthe well depth. The difference here is that the drillstring is not rotating andthe drilling occurs due to the action of the downhole motor. There is mud cir-culation and a high hook weight level.

Reaming or Tool Adjusting: In this stage the bit does not advance,increasing the final well depth. There is circulation and a high hook weightlevel. This circulation indicates that a reaming cycle is being executed orthat the tool-face of the downhole tool is being adjusted.

Tripping: This stage corresponds to the addition of a new section of thedrillstring. The drillstring is anchored causing a low hook weight level. Thedrillstring does not rotate.

Circulating: In this stage there is no gain in the well depth. It is charac-terised by fluid circulation, high hook weight level and a moderated rotationof the drillstring.

Non-Rotating

mode

–

–

RR

NRD

NRRA

T

C


INTELLIGENT WELLSIt is important to notice the parametersreading can be done either from previousstored mud-logging files or from mud-log-ging systems in real time. It means that thesystem could be used either to carry outclassification in a database of drilled wellsor to generate an on-line report in the rig.

Architecture of theClassification SystemThe automated processing of the data isvital due to the great volume of informationinvolved. If we consider a sampling datasecond by second, for just one hour ofoperation would be produced 14400 (4 x3600) parameters value what makes themanual classification a very time consum-ing task.

The system knowledge is represented bya set of rules. In this sense, human knowl-edge was represented in a programmablelanguage. In this work, the operationalknowledge is represented by a set of If -Then rules.

In order to build these rules, human knowl-edge regarding characteristics of eachstage and the relation of each stage withthe four parameters measured by themud-logging system was required. Fromthe relation between stages and chosenparameters six independent rules wereformulated, resulting then in one rule foreach stage. Table 2 presents the rulesused in this work.

System RulesThe stage “Tripping”, for instance, is char-acterized when there is no well depth vari-ation, no drillstring rotation, and there islow hook weight and low pressure levels inthe stand pipe.

The labels “High”, “Low” and “Null” used inTab.1, actually correspond to a range ofvalues. The ranges vary according to therig and parameter considered. For exam-ple, for a particular rig, a High WOH levelcan be a value above 250 klbs, while aLow level would be a value below 250klbs.

The rules presented in Table 2 are a firsteffort to build a more complex system ableto classify a larger quantity of stages. Ifadditional technical knowledge aboutstages is added, it will make possibly toobtain a more refined set of rules able toclassify more stages.

ConclusionThe classification system presented canbe used either to classify stored mud-log-ging data of a database of drilled wells orto classify mud-logging data on-line andonboard in a rig. Due to the detailed levelregarding each executed stage providedby the classification system, it can be helpanalyze the individual drilling performanceof each well. Information about the total

time spent on each stage combined withrelated economic costs can be used toassess the real cost reduction benefitcaused by optimized drilling programs andintroduction of new technologies.

Information concerning individual drillingperformance can also be used to buildbenchmarking analysis. In this sense, apetroleum company could use this infor-mation to compare the performance of dif-ferent divisions. On a minor scale, thecompany could compare performance ofrented rigs and identify weak points as partof ongoing improvement process. The

Rules set

InferenceData

reading

Mud-loggingdata

Drilling stagereport

Stageindentification

results produce by the proposed systemmay help in the design of new wells. Theinformation about the time spent to exe-cute a determined stage could be used forplanning new wells in the same region pro-viding cost estimates.

Table 1. Description ofthe considered stages.

Acknowledgements

The authors would like to thankPetrobras, CNPq and CTPetro forsupporting the automated mud loggingsystem.

Fig 1. Assembly of the hook height sen-sor at the drawworks

Fig 2. Assembly of the hook height sen-sor at the deadline.

Fig 3. Assembly of the strokes sensor atthe pump piston.

Fig 4. Assembly of the pressure sensor atthe choke manifold.


REFINING

In the area of refueling, Petrobras willinvest R$ 5.1 billion of which R$ 3.2billion will be for a Refining complex,

R$ 1.2 billion in Pipeline transport, R$200 million for Sea Transport, R$ 300million for petrochemical projects andR$ 200 million for other activities.

The refining area is to be constructed in2006, with an upgrade of the AlbertoPasqualini Refinery (REFAP S.A.) andthe beginning of a new delayed cokingunit in Duque de Caxias Refinery.

Alberto Pasqualini - Refap S/A, theyoungest company in the Petrobras sys-tem, was incorporated in January 2001as part of the asset exchange betweenPetrobras and Repsol-YPF. It operatesthe refinery, which started production onSeptember 16, 1968, and whose namepays tribute to senator AlbertoPasqualini (1901-1960) from RioGrande do Sul, of the project to createPetrobras in 1953. The refinery is locat-ed on land that used to belong to theold Brigadeira Estate, and the mainearly 20th-century manor still stands. Ithas a capacity of 189,000 bopd. And itsmain products are diesel fuel, naphthapetrochemical, gasoline, LPG, jet fuel,fuel oils, bunker, kerosene, asphalt andsolvents.

The Duque de Caxias refinery isPetrobras’ most complete refinery hav-ing been inaugurated in 1961, with onlysix plants, plus the powerhouse. In theearly 1970s, the first lube plant was builtthere. In 1979, it was already runningthe second lube and paraffin plant, withsix new units. The 1980s saw the arrivalof natural gas. In the 1990s, the unitswere designed on quality and diversifi-cation of products and environmentalprotection, such as, for example, the jet

fuel hydrotreatment and diesel unit, andanother for sulfur recovery. The ongoingupgrading process has contributedtoward today's line of 52 Reduc prod-ucts and a capacity of 242,000 bopd. Itsmain products are lubricants, gasoline,diesel fuel, jet fuel, LPG, bunker andpetrochemical naphtha.

The continuity of the other projects inthe refining area that is foreseen for thenext year is destined to the improve-ment of gas and diesel quality. Theinvestment also aims to adapt the pro-file of petroleum through amplificationand modernization of the distillation unit,and increase the refining amount ofnationally produced petroleum.

The joint implementation of a new refin-ery in Pernambuco, with Venezuelanstate-owned petroleum companyPDVSA, which is in the early stages ofproject planning; essential for establish-ing cargo, market and capacity parame-ters.

The investments in pipeline and trans-port are assigned to a logistics base inSão Paulo and projects include:

■ the improvement of São SebastiãoTerminal along the North Coast of SãoPaulo

■ an increase in capacity handling ofpetroleum and derivatives in the Southand Southeast regions.

an alcohol draining system connectingRibeirão Preto and Paulínia Refinery(SP), to Ilha D'água Terminal (RJ)

■ the construction of the PecémTerminal in Ceará, and investments inindustrial, environmental, security andother smaller projects.

The vast majority of resources for Seatransport will be allocated to the pro-gram of modernization and expansion ofshipping, with an investment of US$ 1.2billion until 2010.

The investments in petrochemical activi-ty envisage the implementation of anIntegrated Petrochemical Complex. Thiswill produce basic petrochemical prod-ucts and derivatives from the heavypetroleum. The project of a newPetrobras Nitrogen fertilizer units alsoincludes the beginning of PaulíniaPetrochemicals work, a project for theproduction of polypropylene jointly withBRASKEM.

Resources allocated for 2006 alsoinvolve other plans and projects relatedto the strategic positioning of the com-pany to the department, like the possi-ble amplification of the participation inRio Polímeros and other petrochemicalundertakings.

Refinery investment to total R$ 3.2 bn

❛ The ongoing upgrading processhas contributed toward today's line of52 Reduc products and a capacity of242,000 bopd.❜

❛ The refining area is to beconstructed in 2006, with anupgrade of the Alberto PasqualiniRefinery and the beginning of a newdelayed coking unit in Duque deCaxias Refinery. ❜


Refining capacity Petrobras controls 16 refineries, 11 of which are in Brasil, 2 in Bolivia and 3 in Argentina. The total installed capacity ofPetrobras’s refining operations both home and abroad is 2 million 83 thousand barrels per day. This puts Petrobras in the fifthplace of the largest petroleum refiners amongst public companies.

Installed capacity of refining Brazil

(thousand barrels/day)

Refineries Use

93%

Installedcapacity

Processedvolume

Paulínia – ReplanPaulínia (SP)

352 329

70%Landulpho Alves – RlamMataripe (BH)

306 213

84%Duque de Caxias – ReducCampos Elísios (RJ)

242 204

88%Henrique Laje – RevapSão José dos Campos (SP)

226 198

56%Alberto Pasqualini – RefapCanoas (RS)

189 106

102%Presidente Vargas – ReparAraucária (PR)

189 192

91%Presidente Bernardes –

RPBCCubatão (SP)

170 154

85%Gabriel Passos – RegapBetim (MG)

151 128

98%Isaac Sabbá – Reman

Manaus (AM) 46 45

83%Capuava – Recap

Mauá (SP)53 44

83%Northeastern Lubrificantsand Petroleum Derivates

Plant – Lubnor Fortaleza (CE)6 6

_Total Brazil 1,930 1,619


E&P STRATEGY – PETROBRAS

With three more platforms startingoperation in 2006, Petrobrasshould achieve self-sufficiency

this year, when it is forecast to reach dailyaverage production of 1,910,000 barrelsof petroleum in Brazil. When Petrobras’foreign natural gas and oil production isadded, total Petrobras production is pre-dicted to reach 2.5 million of equivalentoil barrels (BOE) per day. The companyand its subsidiaries are likely to invest R$38.6 billion.

Exploration &ProductionPetrobras’ business plan forecasts that in2010, daily production will be 3,405,000barrels of equivalent oil (BOE) of petrole-um and natural gas, considering both itsBrazilian and International activities.

Expectation is that the oil and gas provedreserves in the country, that today total13.02 billion of barrels of equivalent oilkeep growing, by the incorporation ofprobable and possible reserves, volumesalready discovered, exploratory evalua-tion and with new discoveries in severalBrazilian basins, where Petrobras have aportfolio of 131 exploratory blocks grant-ed by ANP.

Investments of R$ 18.9 billion are esti-mated for this year’s E&P in Brazil, whereR$ 1.8 billion will be allocated for the con-

struction of platforms. New production willcome from platforms coming online in theCampos Basin and elsewhere. The P-50platform, in the Albacora Leste field has acapacity of 180, 000 bopd and the P-34platform in the Jubarte field has a capac-ity of 60 thousand barrels/day. In Sergipe,the SSP-300 platform will start productionfrom the Piranema Field, which has acapacity of 20,000 bopd. Last but notleast, Phase I of the Golfinho field,Espírito Santo Basin will have a capacityof 100,000 bopd.

Additionally, the gas field of Manati, inBahia will start operating with a productionof six million of cubic metres per day.

Looking further ahead, platforms P-52and P-54 will have capacities of 180,000bopd for the Roncador Field, in theCampos Basin, with production plannedfor 2007. The P-51 (South Marlim) and P-53 (East Marlim) platforms are also underconstruction in the Campos Basin; bothhave capacities of 180,000 bopd withplanned commissioning in 2008.

With the acquisition of two new conces-sion contracts of the acquired blocks atthe seventh bid, accomplished in October2005, is foreseen for January 2006.Ninety-six new exploratory blocks wereacquired exclusively or by consortium.Among the blocks where they are partici-pating, 73 are located in the ground and23 in the sea. Petrobras will be the oper-ator in 70 blocks

Gas and Energy In the Gas and Energy area, resources ofR$ 6.7 million are foreseen for 2006, ofwhich R$ 3.8 billion are designated forgas pipeline projects and participation innatural gas providers. R$ 2.1 billion areappointed to thermoelectric projects, R$300 million are assigned to the develop-ment of renewable alternative energyprojects, and R$ 500 million are set forresearch and development, energy effi-ciency and other co-related activities.

2222 00000000 6666 –––– ssss eeee llll ffff ---- ssssuuuu ffff ffff iiii cccc iiii eeeennnnccccyyyy ddddrrrraaaawwww ssss cccc llll oooosssseeeerrrr■■■■ Total production (oil and gas / Brazil and abroad) of 2.5 million of barrels/day. ■■■■ Four platforms with total production of 360 thousand barrels/day of capacity. ■■■■ Total investments of R$ 38.54 billion. ■■■■ Investments of R$ 19 billion in exploration and production in Brazil. ■■■■ Concept planning of Northeast Refinery. ■■■■ Integrated Petrochemical Complex in the State of Rio de Janeiro. ■■■■ Production abroad (oil and gas) of 317 thousand barrels/day (increase of 16%

comparing to 2005). ■■■■ Investments of US$ 3.8 billion in projects of gas pipelines and distribution.

● The renewed contract of sponsorshipwith BMW Williams Formula 1 team.

● Petrobras signs, with the ministry ofMines and Energy and Cities, a covenantfor the amplification of the use of naturalgas vehicle – GNV in the transport of car-

gos and passengers in the cities of theCountry.

● A new discovery of light oil in theSantos Basin, about 160 km from Rio deJaneiro, was announced in March 11th. Inthe drilled well (1,322 metres deep) 40metres of oil reservoir of 33 degrees APIwere found.

● Petrobras refineries had another pro-cessing record in March 9th, with a vol-ume of 1,869,914 barrels/day.

● Signed in Tripoli, capital of Libya, thecontract of exploration of oil and gas inthat country 200 to 700 metres of depth.

● Announced the purchase of aThermoelectric Plant of Ceará, owned bythe company MPX, for US$ 137 million.

● Signed the contract for expansion and

Petrobras E&P plans3000

2004

1.758

1.958

265

1.493

274

1.684

508

2.300

2.808

2005 2006 2010

2500

2000

1500

1000

500

Oil

Brazil’s forecast increase in national oil and gas production

+ 200 mil boe/day in 2005

7.6% per year

mil b

oe

/da

y

Se

lf-s

uff

icie

ncy

Gas

0

2005 highlights

2006 EPstrategy

By Petrobras Press Office


E&P STRATEGYmodernization of Gabriel PassosRefinery – Regap, located in Betim, inBelo Horizonte, investing US$ 1.01 billionand creating 500 direct and 5000 indirectjobs.

● Signed a long-term contract for thecharter of a revolutionary new platformmodel destined for the Piranema field, inthe Continental Platform of the State ofSergipe, for the production of 20 thousandbarrels/day of light oil, of 43º API. The newone-pillar type platform will have a doubleskull and circular shape. It will be possibleto store 300 thousand barrels of oil andcompress 3.6 million of m3 of gas/day.

● For the first time, the production ofpetroleum surpassed 1.7 million barrelsper day, in April 6th.

● Approves charter of P-53 platform, des-tined to the field of East Marlim, inCampos Basin, with the capacity to pro-duce 180 thousand barrels per day. Thework will allow the creation of 4000 directjobs in Brazil and should be concluded in29 months.

● Petrobras inaugurates Diesel 500, with75% less sulphur, destined for bigBrazilian cities. Developed in its refiner-ies, the new diesel will contribute toimproving air quality in large urban cen-ters.

● May 12th: for the first time Petrobrassurpasses the mark of 1.8 million barrelsof petroleum production per day,approaching Brazilian self-sufficiency.

● Record profit of R$ 5 billion in the firstquarter of 2005, a commercial surplus of28 thousand barrels and an increase of21% in its market value that passed R$122.2 billion. The ordinary shares of thecompany increased in value by 10.3%,while the São Paulo Stock Market indexincreased only 1.6%, on the first quarter.

● Petrobras is elected the best companyin Latin America, prestigiously awarded byThe New York Post with the ‘Oscar’ of thebusiness world.

● P-47 Platform received and operating inMarlim Field, in the Campos Basin, con-nected to four other production platformswith the objective of treating and storingpetroleum, increasing its quality and mar-ket value for exportation.

● Signed contract for petroleum exporta-tion in the field of Marlim to China.Exportation to this country should achieveone billion dollars per year.

● President Luiz Inácio Lula da Silvaattends the inauguration of three newunits at Duque de Caxias Refinery –REDUC, in Rio de Janeiro.

● José Sérgio Gabrielli de Azevedo isappointed as President of Petrobras,replacing the geologist José EduardoDutra who administered the companysince January 2003.

● Approved the construction of the newPetrobras headquarters in Espírito Santo,inspired by the architectural concepts ofthe ancient Penha Monastery. Petrobrasforecasts that the state of Espírito Santowill become the second largest Brazilianproducer of petroleum in the first term of2006, with 180 thousand barrels per day.

● In Colombia, the inauguration ofLubrax’s lubricants line, with the sponsor-ship of local company Coexito, which willbe in charge of initially distributing 20 dif-ferent lines of lubricants that will be man-ufactured in that country. In a secondphase, other products will be offered tothe Colombian market. The Lubrax brandhas more than 120 products in Brazil.

● New record of petroleum production byPetrobras refineries, reaching 1,875,000barrels in July 27th.

● The economist Almir GuilhermeBarbassa, Executive Manager ofCorporative Finances and Treasury, hasconfirmed the Financial and RelationsBoard with Investors.

● Petrobras achieves the Brazilianrecord of depth drilling in August 12th,with an inclined well that achieved 6,915

metres beyond the bottom of sea. Thewell was drilled on BMS-10 block, in theSantos Basin, located 200 km from thesouth coast of Rio de Janeiro.

● In August, Petrobras America, theUnited States subsidiary, finished up 53blocks in the Mexican Gulf by a totalamount of US$ 30.1 million, with 100%participation.

● The Move Program – Brazil, which inte-grates the Petrobras Zero HungerProgram, helped 23,000 adults gain liter-acy skills, and passed its half way goal ofhelping a total of 40,000 adults to readand write until 2006.

● Business plan approved for the periodof 2006 – 2010 forecasting total invest-ments of US$ 56.4 billion, of which US$49.3 is in Brazil and US$ 7.1 is abroad.The combined production of petroleumand gas expected for 2010 will be3,405,000 equivalent barrels per day.

● Petrobras obtains one more explorato-ry block from the government of Nigeria,as a deep water operator, in partnershipwith the Norwegian Statoil and withNigerian Ask Petroleum. The block, of1,030 square kilometres, and 1000 to2000 metres in depth is located in theNiger River Delta next to Lagos city.

● For the second consecutive yearPetrobras was elected by the Finances,Administration and AccountingExecutives Association, as the MostTransparent Quoted Company of Brazil.

● In September, with both BrazilianPresident Luiz da Silva and VenezuelanPresident Hugo Chávez in attendance,covenants and agreements betweenPetrobras and Venezuela Oil Tankers –PDVSA were signed by the respectivecompany presidents; José SergioGabrielli de Azevedo (Petrobras) andRafael Ramirez.(PDVSA), RafaelRamirez. The agreements involve theconstruction of a refinery in Pernambucoand partnerships in exploration and pro-duction areas. The refinery will be capa-ble of processing 200 thousand barrels ofheavy petroleum per day, half forPetrobras and other half for PDVSA, with50% participation by each company. The

❛ For the second consecutive yearPetrobras was elected by the Finances,Administration and AccountingExecutives Association, as the MostTransparent Quoted Company of Brazil.❜

❛ May 12th: for the first timePetrobras surpasses the mark of 1.8million barrels of petroleum productionper day, approaching Brazilianself-sufficiency. ❜ ☛

E&P STRATEGY38 Brazil Oil and Gas Issue 1

project expects investments of US$ 2.5billion, in phase one of technical defini-tions.

● In October Petrobras Transports –Transpetro, opened a bid for constructing26 ships of 42 of the ShippingModernisation and Expansion Program.The ships will be constructed in Brazilwith 65% of national content guaranteed.The initiative that will generate 20,000jobs, is decisive to consolidate the coun-try’s shipping construction industry. Thisindustry already occupied second placeon a global ranking in the 80’s and main-tained the position to date.

● As a result of the commitment of thecompany’s administration and all its workforce, to conduct business in a profitableway, but with social and environmentalresponsibility, Petrobras was classified byMoody's Investor Service with an officialinvestment grade. Among the benefits ofthis new position, are lower capital costs,amplifying the opportunities of develop-ment of new projects and the possibilityof improved results shareholders, makingthe company more competitive.

● In October Petrobras was chosen todevelop its Corporate University, the pilotproject of the initiative program of UNO,called Globally Responsible Leaders, fac-ing the formation of directors of the com-panies in questions related to social andenvironmental responsibilities.

● At 7th Exploratory Blocks Bid, promot-ed by Petroleum, Gas and Bifuel NationalAgency (ANP), in October 17th and 18th,Petrobras acquires, with exclusivity orconsortium, 96 new exploratory blocksand executed call in 109 of the 1,134blocks offered. 73 of the acquired blocksare located on the ground and 23 in thesea. Petrobras participates as the opera-tor of 70 blocks.

● 74 new projects published approved bypublic selection to integrate the PetrobrasZero Hunger Program, which will destineover R$ 18 million for the initiatives tocombat social inequality in the Country,by generating employment and profit,improving the education condition andprofessional qualification, and warranty ofthe children and teenager’s rights. Until2006, the company will invest R$ 303 mil-lion in Petrobras Zero Hunger Programprojects, which are earmarked to helpmore than four million people.

● Petrobras and Transpetro signedcovenants with environmental NGOs, tointroduce community vegetable gardensin a piece of land with 5 kilometres thatcovers the pipelines of the company inthe cities of Nova Iguaçu and Duque deCaxias, in Baixada Fluminense.

● In the first nine months of the year,Petrobras raised a consolidated net prof-it of R$ 15.6 billion, 23% higher at the

same period in 2004. The excellent oper-ational performance of the Company pro-vided generation of boxes of R$ 34.8 bil-lion from January to September 2005,representing an increase of 30% in rela-tion to the same period in 2004, whichmake the investments of R$ 16.9 billionpossible. The production of petroleumincreased 12% and 27% of the exporta-tion in that period. The collection of dutiesand government contributions were R$42.8 billion and the market value of thecompany increased 54%, achieving R$168 billion.

● The offer of Petrobras International- Braspetro was the joint winner ofthe block Moruy II auction, on thesecond road of the bid for submarineexploration in Bolivarian Republic ofVenezuela, called "Project RafaelUrdaneta - Phase B", with theTeikoku Oil Co., Ltd. The Block has874 km2 of extension, is located inthe southeast part of Venezuela Gulf,to the north of Maracaibo Lake, andapproximately 450km west ofCaracas, the capital of Republic.Petrobras and Teikoku will each have50% participation and the Braziliancompany will be the operator. Theinvestment in the initial exploratoryphase is approximately US$ 20 mil-lion.

❛ In the first nine months of theyear, Petrobras raised a consolidat-ed net profit of R$ 15.6 billion, 23%higher at the same period in 2004. ❜

● Petroleum of excellent quality discov-ered, in the city of Esplanada, inRecôncavo Basin, 170 kilometres fromSalvador. Reservoirs of oil and gas werefound at 420 metres depth. In accordancewith the preliminary geologic interpreta-tion, the company evaluates that the dis-covery is similar to the situation thatoccurred in September 2004, in the sameexploratory block, in Jandaia Field, wherethe reservoirs are located 900 metresdepth and the current productionachieves 2,400 barrels of oil per day.

● Published by the Chief Minister of theCivil House, DilmaRousseff, in Salvador,Bahia, the Plan ofP r o f e s s i o n a lQualification ofProminp (MobilizationProgram of NationalIndustry of Petroleumand Natural Gas). ThePlan foresees theinvestments of R$ 220million, until the end of2007, for the formationof 70,000 professionalsof university, technicaland basic levels toattend the need of 12states of theFederation, where theprojects of investmentswill be introduced to thesector.

● President Luiz Inácio Lula da Silva par-ticipates in the launch celebration of theP-50 platform, at Mauá-Jurong Shipyard,in Niterói (RJ).

● Named as Inhambu, a new heavy oilfield (10º API) was declared commercialin Espírito Santo Earth Basin, in the cityof Jaguaré, North of the State, about 180km from Vitória.

● Petrobras receives "Marketing Award2005", from the Brazilian Association ofBusiness and Marketing. The awardacknowledges the professionals andcompanies that stood for excellence intheir business fields.

● Financing approved by the BrazilianBank for Economic and SocialDevelopment – BNDES, for the construc-tion of a platform. Among the social ben-efits to be provided for the State ofAmazonas, 3,400 direct and 10,200 indi-rect jobs will also be created.



Brazil OG issue 1. - Brazil Oil And Gasbraziloilandgas.com/magazines/BOG_ISSUE_1/pdf/Brazil OG issue 1.pdf · Mauro Martins CEO Wajid Rasheed [email protected] Brazil Oil &

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