Brazil, the Brightspot Dims

Brazil has been one of the countries where oil production has been constantly rising for the past 30 years. They are one of the countries taking up the slack for declines elsewhere. Brazil expects to increase their production from the current 1.54 million b/d to 2.22 million b/d in 2007. This field by field analysis of the biggest Brazilian deepwater fields, which is where most of the increase is coming from shows that there is a limit to this growth in the not too distant future.

Albacora is in the north part Campos basin It had an estimated 400 million barrels of oil equivalent recoverable. It was discovered in 1984 and began producing in 1996. The production has already peaked in 1998 at 174,000 barrels of oil equivalent per day (boe/d). Thus this field produced 139,860 barrels of oil per day in 2003. It is a declining field.

Albacora Leste with 700 million boe was discovered in March 1986. The field is currently producing but will peak in production at 145,000 boe/d in 2006. Thus, its peak production is only two years away.

Barracuda was discovered in April 1989. It holds 867 million barrels of oil with 10.7 billion cubic meters of gas. Its production will peak in 2006 at 150,000 boe/d, just two years away.

Caratinga was discovered in 1994 and holds 362 million barrels of oil and 4 billion cubic meters of gas. The field will start producing in December 2004 with a peak production of 125,000 barrels of oil by 2006.

Espadarte field, along with the Voador and Marimba fields hold 428 million barrels of oil. Production started in August 2000 and Espadarte and Marimba combined will produce a peak of 65,000 barrels of oil per day in 2006.

Roncador is estimated to hold 2.7 billion barrels of oil and was discovered in 1996. Production started in may 2002. This field will not reach its peak production capacity until 2011 when it is expected to produce 481,000 boe/d. In 2003 it produced 77,000 boe/d.

Marlin was discovered in January 1985. It has 1.7 billion barrels of oil reserves. It will peaked production in 2002 at 586,000 boe/d. It is a declining field. In 2003 it produced 532, 000 boe/d. This illustrates how rapidly a field can decline.

Marlim Leste has 150 million barrels of oil. It is a small field discovered in January 1987. The field will reach peak production of 153,000 bo/d in 2008.

Marlim Sul was discovered in November, 1987. It has 700 million barrels of proven reserves with possible reserves of 1.7 billion. It will reach a peak production of 419,000 boe/d in 2010

Jubarte was discovered in January 2001. It has 600 million barrels of proven reserves. The production will start in 2005 and peak in 2008 at 150,000 barrels per day.

Cachalote was discovered in November 2002. It has 350 million barrels of oil. It is in the planning stage.

Bijupira-Salema fields began producing in July 2003. It contains 170 million barrels of reserves. The peak production will be 80,000 b/d but the date is unspecified. My suspicion is that it was late last year or early this year.

The thing to notice in the above is how old most of these big fields are. Most were discovered in the 80’s and 90s. Brazil is not finding big fields now like they were. then. Indeed a recent article by Sandrea noted that the peak in discovery was in 1987. That means that the peak of Brazilian production may only be 5-6 years away. Given that this is one of the brigher spots in the oil industry, this detail information does not bode well for the world.

This continues a trend of the industry feeling like they have few prospects to drill. An article in Lloyd’s List (Wingrove, 2004) said:

     “A second reason for capital expenditure to rise less rapidly than expected is the lack of attractive projects globally and especially in North America.”
     “Although there have been a few successes in exploration over the last five years, generally only a few large offshore fields have been discovered.
     “The main successes have been outside the US in the Caspian Sea, the deepwaters of West Africa, Brazil and in the ultra-deepwaters of the Gulf of Mexico.”

References

Guntis Moritis, “Deepwater Production off Brazil Continues Steady Increase,” Oil and Gas Journal, Aug 9, 2004,

Ivan Sandrea, “Deepwater Oil Discovery Rate may have Peaked; Production peak may follow in 10 years,” Oil and Gas Journal, July 26, 2004 p.20

Martyn Wingrove, “Exploration Fails to Profit as Price Soars,” Lloyd’s List, June 2, 2004, p. 4

Internet sites:

http://www.gasandoil.com/goc/company/cnl84068.htm

http://www.gasandoil.com/goc/company/cnl03302.htm

http://www.chilnet.cl/news/brief.asp?Cod_noticia=0000006368

technology.com/projects/barracuda/specs.html

http://www.gasandoil.com/goc/company/cnl85238.htm

http://www.offshore-technology.com/projects/marlimpetro/

http://www.tradepartners.gov.uk/oilandgas/brazil/opportunities/opportunities.shtml