Brazil will deliver around 40 million cubic metres per day (MMcm/d) from its ultra-deep ‘pre-salt’ fields via pipeline by 2014, rather than via floating LNG (FLNG) technology, the chief executive of state-owned company Petrobras said on Tuesday. JoséSergioGabriellialso played down speculation over his own future at the company.
Gabrielli told journalists at the Oil & Money conference in London that around 20 MMcm/d was being delivered to the mainland via the Mexilhão development, which comprises a fixed production platform and 130 km pipeline. “We have another pipeline under plans right now that would bring gas to the region, that’s going to come into operation by end of 2014. This would add about 20 MMcm/d of capacity,” he said.
In September, Interfax reported that Petrobras had started pumping gas from the BM-S-11 Block in the Lula field, the pre-salt region of the Santos Basin that has yielded the largest oil and gas find of the past 30 years. UK-based BG Group holds a 25% stake in the block and Portuguese-based Galp Energia has 10% (seeFirst gas pumped from Brazil’s pre-salt, 16 September).
Gabrielli added that Petrobras had tested and approved three separate designs for FLNG units, and that at least two of the proposals were “attractive” in financial terms. However, he said that plans for FLNG units were postponed and that units wouldn’t be on-stream before 2015.
He added that Brazil would have 41 MMcm/d of regasification capacity by 2014, with two terminals in the north-east of the country and a third terminal in Rio de Janeiro.
The choice of pipelines over FLNG hinged on the density of the extracted gas, Gabrielli said. “It is better to separate the heavier proportion of the gas and use for petrochemicals. With FLNG, we are going to miss this. We are going to lose this.”
Gabrielli said that Petrobras had no plans to build gas to liquid (GTL) facilities in the pre-salt areas. “We don’t have [GTL] right now. We have some programmes, and a very long-view of GTL in the Amazon, but nothing in the short term.”
The weakening links between OECD countries and non-OECD countries has also changed the world’s export dynamics, said Gabrielli. “Domestic markets are playing a bigger role in the growth of those countries right now compared to the past. They [non-OECD countries] are less dependent now than they were before on the growth of OECD countries.”
“We are going to see a very big shift in oil consumption. There will be less oil consumption per capita in the OECD countries, and more in the non-OECD countries,” he said.
Gabrielli played down speculation that Petrobras’ lower-than-expected investment during 2011 was related to economic uncertainty in Brazil. “It has nothing to do with local content. The world is facing a financial crisis, affecting foreigners more than Brazilians. The slowdown has nothing to do with macroeconomics, it’s more related to an ‘execution-type’ of problem,” he said.
“We are developing fields that are going to produce from 2015, 2016 and so on. So we are investing, at the moment, beyond the crisis,” he added.
The auctions for pre-salt blocks will be held “six to seven” months after Brazil’s Congress approves the legislation surrounding the fields, Gabrielli told Interfax. “We [Petrobras] are going to be mandatorily in 30% of the blocks and we may, voluntarily, bid for the remaining 70%,” he added. Interfax reported last month that the pre-salt auctions are likely to be held in 2013 (Squabbles over Brazil’s pre-salt spoils may delay auctions, 15 September).
Gabrielli played down reports that he will be replaced early next year by the company’s gas and energy director, Maria das Graças Foster. “The Brazilian press has fired the board of Petrobras about 100 times in the last four years,” he told Interfax. BNamericas quoted a source last week as saying that Gabrielli would be replaced by Foster, who was closer to Brazil’s President Dilma Rousseff.
In July, Gabrielli said that production growth from the pre-salt deposits could follow the same trajectory as that of the North Sea in its first decade. The company is forecasting daily oil production of 6.4 million barrels of oil equivalent per day (boe/d) by 2020, which will exceed the North Sea’s 6 million boe/d seen in 1999. The North Sea’s gas production was 10 trillion cubic feet in 2001 and continues to increase.
Brazil’s pre-salt reservoirs span an area of approximately 149,000 square km, with oil and gas at a depth of between 5,000 and 7,000 m below sea level.
Petrobras CEO: Pipelines to deliver pre-salt gas
CEO of Petrobras, José Sergio Gabrielli, said plans for FLNG units have been postponed. (IHT)
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Brazil will deliver around 40 million cubic metres per day (MMcm/d) from its ultra-deep ‘pre-salt’ fields via pipeline by 2014, rather than via floating LNG (FLNG) technology, the chief executive of state-owned company Petrobras said on Tuesday. José Sergio Gabrielli also played down speculation over his own future at the company.
Gabrielli told journalists at the Oil & Money conference in London that around 20 MMcm/d was being delivered to the mainland via the Mexilhão development, which comprises a fixed production platform and 130 km pipeline. “We have another pipeline under plans right now that would bring gas to the region, that’s going to come into operation by end of 2014. This would add about 20 MMcm/d of capacity,” he said.
In September, Interfax reported that Petrobras had started pumping gas from the BM-S-11 Block in the Lula field, the pre-salt region of the Santos Basin that has yielded the largest oil and gas find of the past 30 years. UK-based BG Group holds a 25% stake in the block and Portuguese-based Galp Energia has 10% (see First gas pumped from Brazil’s pre-salt, 16 September).
Gabrielli added that Petrobras had tested and approved three separate designs for FLNG units, and that at least two of the proposals were “attractive” in financial terms. However, he said that plans for FLNG units were postponed and that units wouldn’t be on-stream before 2015.
He added that Brazil would have 41 MMcm/d of regasification capacity by 2014, with two terminals in the north-east of the country and a third terminal in Rio de Janeiro.
The choice of pipelines over FLNG hinged on the density of the extracted gas, Gabrielli said. “It is better to separate the heavier proportion of the gas and use for petrochemicals. With FLNG, we are going to miss this. We are going to lose this.”
Gabrielli said that Petrobras had no plans to build gas to liquid (GTL) facilities in the pre-salt areas. “We don’t have [GTL] right now. We have some programmes, and a very long-view of GTL in the Amazon, but nothing in the short term.”
The weakening links between OECD countries and non-OECD countries has also changed the world’s export dynamics, said Gabrielli. “Domestic markets are playing a bigger role in the growth of those countries right now compared to the past. They [non-OECD countries] are less dependent now than they were before on the growth of OECD countries.”
“We are going to see a very big shift in oil consumption. There will be less oil consumption per capita in the OECD countries, and more in the non-OECD countries,” he said.
Gabrielli played down speculation that Petrobras’ lower-than-expected investment during 2011 was related to economic uncertainty in Brazil. “It has nothing to do with local content. The world is facing a financial crisis, affecting foreigners more than Brazilians. The slowdown has nothing to do with macroeconomics, it’s more related to an ‘execution-type’ of problem,” he said.
“We are developing fields that are going to produce from 2015, 2016 and so on. So we are investing, at the moment, beyond the crisis,” he added.
The auctions for pre-salt blocks will be held “six to seven” months after Brazil’s Congress approves the legislation surrounding the fields, Gabrielli told Interfax. “We [Petrobras] are going to be mandatorily in 30% of the blocks and we may, voluntarily, bid for the remaining 70%,” he added. Interfax reported last month that the pre-salt auctions are likely to be held in 2013 (Squabbles over Brazil’s pre-salt spoils may delay auctions, 15 September).
Gabrielli played down reports that he will be replaced early next year by the company’s gas and energy director, Maria das Graças Foster. “The Brazilian press has fired the board of Petrobras about 100 times in the last four years,” he told Interfax. BNamericas quoted a source last week as saying that Gabrielli would be replaced by Foster, who was closer to Brazil’s President Dilma Rousseff.
In July, Gabrielli said that production growth from the pre-salt deposits could follow the same trajectory as that of the North Sea in its first decade. The company is forecasting daily oil production of 6.4 million barrels of oil equivalent per day (boe/d) by 2020, which will exceed the North Sea’s 6 million boe/d seen in 1999. The North Sea’s gas production was 10 trillion cubic feet in 2001 and continues to increase.
Brazil’s pre-salt reservoirs span an area of approximately 149,000 square km, with oil and gas at a depth of between 5,000 and 7,000 m below sea level.