DW: International E&P firms to go for Brazilian pre-salt fields?

One of Petrobras' FPSOs operating offshore Brazil
One of Petrobras’ FPSOs operating offshore Brazil

In a move to increase foreign investment amid the nation’s worsening economic position, Brazil’s Congress has approved legislation that will remove state-controlled Petrobras’ obligation as sole operator on the country’s pre-salt developments, Douglas-Westwood, an energy intelligence group, said in its report on Monday. 

Discovered in 2007, these ultra-deepwater fields represent a huge opportunity – they are the largest group of offshore reserves discovered this century, the energy intelligence group further said.

Financial difficulties resulting from the ongoing low oil price environment, combined with the crippling impact from the “Operation Car Wash” corruption scandal, have slowed development in the prolific pre-salt fields, as mounting financial pressure has led the NOC to cut Capex plans and production targets.

According to DW, the opening of these deepwater assets to foreign investors is intended to increase development and production from the pre-salt fields, whilst allowing Petrobras to shift focus to more developed plays with existing infrastructure and lower Capex requirements.

Due to the significant potential the pre-salt fields offer, many international E&P companies can be expected to vie for a slice of the substantial pie – Shell has previously commented on the nation’s need to open up to foreign investment. However, the group noted, E&P activities in Brazil are largely controlled by Petrobras – the few internationals currently active in deepwater Brazil, namely Shell and Anadarko, may see themselves tied to commitments elsewhere. Shell’s recent acquisition of BG sees the company bound to projects inherited through the deal; and Anadarko has the large Shenandoah discovery in the GoM, as well as advancing developments in Mozambique.

As such, Douglas-Westwood said, the impact from last week’s legislation change may not be as significant as the nation’s government hopes. The current oil price environment has the potential to deter some operators from the huge Capex required for ultra-deepwater developments, particularly if not already present in the nation. However, DW claimed, if OPEC’s recent announcement to cut production results in a significant oil price rally next year, it may become somewhat of a moot point, increasing the attractiveness of the pre-salt fields to international investors.

Share this article

Follow Offshore Energy Today

Events>

<< Dec 2019 >>
MTWTFSS
25 26 27 28 29 30 1
2 3 4 5 6 7 8
9 10 11 12 13 14 15
16 17 18 19 20 21 22
23 24 25 26 27 28 29
30 31 1 2 3 4 5

Africa Oil Week 2020

For over 25 years Africa Oil Week has been the meeting place for Africa’s most senior E&P stakeholders.

read more >

CERAWeek 2020

 Each year, CERA clients gathered for a few days in Houston…

read more >

Offshore Technology Conference (OTC) 2020

The Offshore Technology Conference (OTC) showcases leading-edge technology for offshore drilling, exploration…

read more >

2020 EXPLORATION AND PRODUCTION STANDARDS CONFERENCE ON OILFIELD EQUIPMENT AND MATERIALS

The development of consensus standards is one of API’s oldest and most successful programs.

read more >

Jobs>

Looking to fill a job opening?

By advertising your job here, on the homepage of OffshoreEnergyToday.com, you'll reach countless professionals in the sector. For more information, click below...

apply

Looking to fill a job opening?

By advertising your job here, on the homepage of OffshoreEnergyToday.com, you'll reach countless professionals in the sector. For more information, click below...

apply