Brazil Not Wasting Time Developing Huge Offshore Resources

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While the US Obama administration carries on a de facto offshore oil moratorium, Brazil is rushing to develop its own vast offshore petroleum resources. Brazil is spending over $220 billion in an attempt to almost triple its offshore production from over 2 million bpd to over 6 million bpd in 2020. Brazil's oil industry faces tremendous challenges, working far offshore and deep under the surface.

...the technical and logistical challenges involved in tapping this oil are immense – the oil is under a layer of salt as far below the waves as commercial jetliners cruise above them. As a result, Petrobras, the Brazilian oil giant with a 30% stake in all sub-salt concessions, predicts that between 2011-2015, it will make $224.7 billion in investments – $127.5 billion of which is for exploration and production.

The fruits of those investments are already visible in the floating frontier towns.

“It is really impressive what is out here, 100km off the shore,” said Willem Van Beek, a Dutch “mud engineer” who drills the wells, from an oil platform at Espiríto Santos Basin recently. “It’s like a complete offshore city. You see thousands and thousands of lights.”

With reserves this big, Brazil is experiencing an oil boom: 50,000 people were at the Brazil Offshore bi-annual conference in the oil town of Macaé, in June this year. “Brazil is the biggest new front for oil in the world,” said Petrobras CEO José Gabrielli.

...Brazil’s platforms and rigs sit above 2,000 meters of water. The oil is anywhere between 2,000-7,000 meters below the sea bed and to get to it, engineers must drill through clay, then a variety of geographical formations like shale or calcium carbonate, before they hit a thick later of salt that can be thousands of meters thick.

“You have to develop new technology,” says Norman Gall, Executive Director of the Fernand Braudel Institute of World Economy (Instituto Fernand Braudel de Economia Mundial) in São Paulo, and a sub-salt expert. “You have to deal with processing the oil at these depths. You have all of these problems. That’s why it’s so expensive.”

...at depths like these, the water is close to freezing. “The temperature changes the viscosity of the drilling fluid,” says Van Beek. This, in turn, affects the oil, which is “very thick, like a syrup. The way to make it more fluid is by heating it up. They do injection wells. When you produce oil you produce gas. The gas is on top of the oil, so you pump it back in at the bottom of the reservoir and it forces the oil up.”

...The goal now is to move this processing under the sea. At its research centers like the giant CENPES, at the Federal University of Rio, Petrobras is developing technology to separate oil from water, gas and water on the seabed as part of a move to completely automate processing. Carlos Fraga, CENPES executive manager, told Brazil’s Valor Econômico newspaper that he would like to eliminate the need production platforms within a decade.

FMC Technologies plans to start operating a sub-sea separation unit for Petrobras in the Marlim Field, in the Campos Basin, later this year. “This is new technology, and these systems are supposed to run for 20 years, which is the life of an oil field,” says Gall. _Txchnologist

And still, Petrobras continues its intensive exploration for new resources

The ramp-up in production of Brazil's offshore parallels increased production slated for Canada's oil sands. Between the two developments, an increase of almost 10 million bpd is expected by close to 2020. If Venezuela could get rid of Hugo Chavez and allow international oilcos to develop its heavy oil deposits, another 5 million boepd could conceivably be added, if they started right away. And if the US could get rid of President Obama and his Department of the Interior Secretary Salazar, they could add another 5 million bpd by 2020 without too much trouble, using all available resources -- including kerogens, CTL, GTL, and offshore oil.

Combining these increases would yield an extra 20 million bpd in an energy climate where many analysts believed that oil production had peaked at around 85 million bpd in 2008. Realistically, of course, the western hemisphere will be lucky to add 10 million bpd to current production, due to political, manpower, technological, and logistical limitations. Particularly if the incompetents, Chavez and Obama, continue in office for several more years.