Chevron:Frade Field A Solid Base To Expand Brazil Operations
02 Ottobre 2009 - 4:30PM
Dow Jones News
U.S. petroleum major Chevron Corp. (CVX) moved into a new
neighborhood in June - the bustling, azure oil fields of the
Brazilian South Atlantic.
Chevron first pumped oil from its Frade field, 120 kilometers
off the coast of Espirito Santo state, in June. The newly installed
Frade - an FPSO, or floating production, storage and offloading
vessel - joined counterparts belonging to Brazilian state-run
energy giant Petrobras (PBR), which operates the nearby Roncador
field.
"We're certainly not alone out here," said Chevron's Jeff Post,
facilities engineering manager for the Frade. Looming in the
distance are Petrobras' monstrous P-54 platform and its smaller
cousin, the FPSO Brasil.
Chevron hopes its new outpost will lay the foundation for an
even greater presence in Brazil, and further partnerships with
offshore neighbor Petrobras. Petrobras holds a 30% stake in Frade,
which Chevron operates with a 51.7% share. The remaining stake is
held by Frade Japao Petroleo Ltda.
"You always see this issue when you do a country entry. You want
to get that first project operational there," George Kirkland,
Chevron's executive vice president for global upstream and gas.
"It's a good basin; it's a good place to be," said Kirkland, who
as of next year will also be the California-based company's vice
chairman.
Chevron hopes its success getting the Frade field launched will
show the company can deliver and is ready for more, perhaps even
playing a role in the recently discovered offshore fields in the
subsalt region.
The so-called subsalt discoveries were made under a thick layer
of salt in the Santos Basin off the coast of Sao Paulo and Rio de
Janeiro states. The oil lies under more than 2,000 meters of water
and a further 5,000 meters under sand, rock and a shifting layer of
salt.
While Chevron doesn't hold any acreage in the promising
frontier, the company could bid for partnerships with Petrobras
under the new production-sharing regime proposed by Brazil's
government. Chevron already has a strong relationship with
Petrobras, which will be lead operator of government-controlled
subsalt blocks.
For now, Chevron will concentrate on ramping up output at Frade
and the stakes it holds in four other Brazilian offshore
fields.
Papa-Terra and Maromba - where Chevron holds 37.5% and 30%
stakes, respectively - are operated by Petrobras. Papa-Terra, once
seen as the most advanced project, has been delayed by high costs.
Petrobras canceled tenders for a platform and FPSO slated to
operate at the field.
Maromba, however, has generated excitement because of subsalt
potential. A pilot production system is under evaluation to glean
more information about the reservoirs present.
Chevron also holds 20% stakes in the Atlanta and Oliva fields,
which are operated by Royal Dutch Shell PLC (RDSA, RDSB). Shell
holds a 40% stake, while Petrobras also retains 40%.
Meanwhile, Chevron continues the long, arduous task of ramping
up output at Frade, which should reach peak production of 90,000
barrels a day in about two years. Recoverable reserves at the field
are estimated at between 200 million and 300 million barrels of
heavy crude.
"We're all excited about first oil, but that's just the start,"
said Post.
A work crew of about 120 - down from 240 before the first oil
was pumped - is bringing the FPSO's topside systems online. The
first cargo of crude will be delivered this month.
Also in October, the third production well should be hooked up,
Post said. It's currently being drilled by Transocean's S-706 rig,
which was hired specifically to drill Frade's 12 horizontal
production and seven water injection wells. The first water
injection well is expected to be ready in November.
Currently, two production wells are connected to the FPSO,
producing about 15,000 barrels a day. The company expects to end
2009 with output of 30,000 barrels a day.
-By Jeff Fick, Dow Jones Newswires; 55-21-2586-6085;
jeff.fick@dowjones.com
(Angel Gonzalez in Houston contributed to this report.)