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Brazil's Enauta extends Atlanta field shutdown on coronavirus outbreak


Extends stoppage by one week

Output was halted Jan. 13

Production line repaired

  • Author
  • Jeff Fick
  • Editor
  • Kshitiz Goliya
  • Commodity
  • Natural Gas Oil Shipping

Brazilian independent oil and natural gas producer Enauta will extend a production shutdown at the offshore Atlanta field by an additional week because of a coronavirus outbreak onboard the field's floating production unit, the company said Jan. 20.

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"The company is following all protocols and taking all measures to preserve the health and safety of workers and expects production to restart next week," Enauta said.

Enauta had stopped production Jan. 13 to inspect and repair a production line, the latest in a series of technical difficulties and equipment problems to strike the heavy oil producer. Repairs to the production line were completed Jan. 19, Enauta said.

Brazil is currently in the midst of an upswing in coronavirus cases and hospitalizations as the omicron variant tears across Latin America's biggest country. The surge undermined gains made throughout 2021 as Brazil expanded its vaccination program, including booster shots in the second half of the year. The lull in the pandemic had allowed Brazil to ease social-distancing measures and increase urban mobility, leading to a return in refined-product demand.

The latest outbreak has also hit offshore installations operated by state-led oil company Petrobras, with several workers reporting that they were not informed of positive tests until after arriving at offshore facilities, according to unions representing oil workers.

The extended shutdown at Atlanta will further undercut production in January and continue the disruptions seen over the past 18 months.

Enauta, however, said that it took advantage of the stoppage to bring forward the company's maintenance schedule at Atlanta. Enauta previously said that it will be required to carry out a 35-day shutdown in 2022 to comply with Labor Ministry regulations.

"Maintenance activities that were to be conducted during obligatory shutdowns to be carried out throughout the year were anticipated during this period," Enauta said.

Ongoing outages

Atlanta, meanwhile, continued to suffer outages ahead of a key first-quarter decision on the field's future. Enauta expects to make a final investment decision on whether to install a definitive production system that would pump about 50,000 b/d. First oil from the project, if approved, is expected in mid-2024.

Since the second half of 2020, production at Atlanta has been undermined by water-treatment issues, corrosion and faulty submerged centrifugal pumps. Enauta shuttered production in November 2020 in a stoppage that lasted until February 2021.

The difficulties undermined output at the field throughout the year, with Atlanta failing to meet Enauta's revised production forecast of 12,000 b/d for 2021. Atlanta produced 11,200 b/d in 2021, down from 17,200 b/d in 2020, Enauta said in a production report Jan. 7.

Atlanta has operated with two of its three production wells in operation since September, when Enauta encountered the most-recent pump failure. The pumps and oil heaters are needed to lift the field's highly viscous crude from the seabed to the FPSO on the surface. The oil is so thick that it will fail to flow from a beaker tipped nearly upside down.

Repairs to the third production well are currently underway, with a return to operations expected in the first quarter of 2022, according to Enauta.

Output should get an additional boost from a fourth production well, which was approved Dec. 17. The drilling campaign is expected to start in the fourth quarter of 2022, with first oil likely in early 2023. The well will cost about $60 million to drill and complete, with an additional $15 million required to connect the well to the Petrojarl I floating production, storage and offloading vessel, or FPSO, that currently handles production from the field.

The new well is expected to include spare pumping capacity, according to Enauta.

Despite the troubles, Enauta and FPSO operator Teekay Offshore agreed to extend the operations and maintenance contract for the FPSO Petrojarl I until May 2025. That will allow Enauta to maintain output at Atlanta while a new FPSO is installed at the field and production transferred to the definitive production system.

Atlanta's 14-16 API crude generates strong demand from global refiners, often trading at a slight premium to dated Brent, according to Enauta. The crude is prized for its low sulfur content, which makes it ideal for processing into ULSD and bunker fuel that meets International Maritime Organization standards.