Libra’s exploration challenges

Claudio Paschoa

January 1, 2015

The giant Libra field has many challenges, sitting in Brazil’s deepwater pre-salt. Claudio Paschoa take a look at the development plans.

The Libra prospect and the pre-salt region.
Image from Mercopress.

Field of View is a new monthly section that highlights an offshore oil and gas field, tracking its development, and the challenges and solutions involved.

Petrobras, Brazil’s national operator, is beginning its exploration of the massive Libra field in the ultra-deep Santos Basin with plans that include seismic reprocessing, two exploration wells and an extended well test.

The Libra pre-salt field, 183km (113mi) off Rio de Janeiro, has 8-12 billion bbl estimated reserves, but offers a number of technological and logistical challenges. Ultra-deepwater pre-salt developments are considered to be among the most challenging projects for the industry.

Drilling through up to 7km of rock and thick salt layers requires advanced technology, such as managed pressure drilling (MPD), to avoid wellbore creeping and deformation. There is therefore a demand for drillships with MPD capability, as well as a need for better seismic imaging under the salt, improved recovery methods, such as the water-alternating-gas (WAG) injection system, and for custom-built high-capacity FPSOs.

Libra encompasses 1548sq km (598sq mi). It was discovered through well 2-ANP-0002ARJS in 2010. A consortium, comprising Petrobras (40% interest) and partners Shell (20%), Total (20%), China National Offshore Oil Corp. (10%) and China National Petroleum Corp. (10%) won the license to develop the field in the October 2013 bidding round and agreed to pay a signing bonus of about US$7 billion.

Petrobras is the sole operator and the Brazilian government’s share of the profit oil (oil produced after initial development costs are paid) is 41.65%. The Pré-Sal Petróleo S.A. (PPSA) was created as a government mechanism solely dedicated to manage and audit pre-salt field developments, beginning with the Libra field. 

According to plans laid out during the Rio Oil & Gas 2014 conference by PPSA CEO Oswaldo A. Pedrosa Jr., the Libra development will use advanced seismic acquisition technology for a new seismic survey covering the entire area of the prospect. Existing 3D seismic data will be reprocessed to improve imaging in critical areas. The original seismic survey was done by CGG and they will be in charge of reprocessing and the new survey, which is already under way.

PPSA CEO Oswaldo Pedrosa Jr. Photo by Valter Campanato- Agência Brasil.
 

Two exploration wells were drilled in 2H 2014 and will be completed by 2015. These two wells are planned for the first phase of the Minimum Exploration Program (known by Portuguese acronym PEM) agreed with Brazil’s National Oil, Natural Gas and Biofuels Agency (ANP). Petrobras is targeting three or more fully MPD capable ultra-deepwater rigs for Libra in an ongoing tender.

MPD was used successfully on wells at the Franco South, Lara and Lula North fields. The technology proved to be very efficient in the complicated deviated entrances to pre-salt reservoirs, making these difficult wells viable and reaching targeted depth, where other drilling technologies may have failed. MPD has also proven to be capable of increasing productivity, improving drilling safety and possibly even giving the operator new options for circulating gas kicks. Until recently, Weatherford was the sole manufacturer of the MPD system, although Aker Solutions is now also in the market after its 2013 acquisition of Managed Pressure Operations.

In October, Petrobras announced that the Libra Consortium had signed a letter of intent with Odebrecht/Teekay (OOGTeekay), winner of a tender, for the charter of an FPSO designed for the extended well test campaign at the Libra field. The delivery of the FPSO and the start-up of the first extended well test are scheduled for 4Q 2016. The plan is to conduct tests in several distinct areas of the block, in order to evaluate the production performance and acquire additional data on the reservoirs.

Future production systems will be designed based on these data. For each test, two wells will be connected to the FPSO: one oil producer and one gas injector. The extended well tests will be the first in the world to carry out a gas re-injection system. The FPSO will have a 50,000 bo/d processing capacity and 141.25 MMcf/d (4 MMcu m/d) gas injection capacity. Most of the produced gas will be re-injected into the reservoir for pressure maintenance and a small part will be consumed during operations.

According to the original Libra production-sharing contract, the exploratory phase would run through December 2017. The extended well test, a key part of the approximately $450 million exploration development plan, is to begin in 2016, at the latest, as the partners in the Petrobras-led consortium are hoping to anticipate production start-up in 2017.

“The idea is to do this as a fast-track phased development based on robust and flexible solutions,” Pedrosa says. “We’ll learn from the first phase. Libra is too big. It’s impossible to do this kind of thing with just one unique project development. You have to do it in parts. We are going to learn a lot from each phase and find the best solutions for the next phase. We need to have solutions based on robustness and flexibility,” Pedrosa says.  

Petrobras, along with the Brazilian government have been sponsoring a series of technical training programs in different areas and catering to different levels of expertise in order to solve this problem. However, further complicating matters is the tight oil and gas supply chain and service market in Brazil. Pedrosa says that the supply chain demand is predicted to reach an estimated $400 billion in the next decade. “It is very important to say that there is a challenge because we need to do fast-track development, and we need to comply with local content requirements,” Pedrosa says.

“It is tight in Brazil and worldwide,” he says, adding that this is something the consortium needs to think about and work on with others. To help overcome constraints in the supply and services market he suggested Brazilian and international suppliers form partnerships.

PPSA was created in 2013 with the main duties of managing the production sharing agreement, representing the federal government’s interest, managing unitization agreements and trading the share of profit oil on behalf of the federal government, Pedrosa says. The PPSA also ensures that the local content commitment is met. As chair on the operating committee, PPSA also has veto power.

According to Pedrosa, “PPSA’s job is to manage and audit the project execution for exploration, appraisal, development and production; monitor and audit the operating costs and capex; manage the recognition of qualified expenditures; [and] perform technical and economical analysis of plans and programs to be executed in each production-sharing agreement.”

Focusing on the Libra contract and managing production unitization agreements, Pedrosa said that, “Everything is going alright at this stage and we are excited to start drilling the new exploration wells.”