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Brazil readies two new FPSOs for subsalt oil and natural gas output: Petrobras

Brazil is in the process of preparing two new floating production,storage and offloading vessels, or FPSOs, to start oil and natural gasproduction in the country's record-setting subsalt frontier, state-ledproducer and refiner Petrobras said Thursday.

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The FPSO P-69 arrived at the Brasfels shipyard in Angra dos Reis, southof Rio de Janeiro, on Tuesday, Petrobras said. The vessel will have 18processing modules installed onboard before heading out to start production atthe Lula Extremo Sul area of the massive Lula Field in 2018, the company said.

The new floating production units are part of eight that will beinstalled offshore Brazil over the next two years, according to Petrobras'investment plan for 2017-2021. The ultra-deepwater region accounted for nearly50% of Brazil's total crude output in January, including a record 1.276million b/d of oil and 49.53 million cu m/d of natural gas from 73 wells.

The FPSO P-69 is part of five new production units expected to comeonstream in 2018, with all of the new FPSOs installed at subsalt fields. Inaddition to Lula Extremo Sul, FPSOs are also expected to pump first oil fromthe Berbigao area in the transfer-of-rights area and the Buzios 1, Buzios 2and Buzios 3 modules of the Buzios Field.

Petrobras owns a 65% operating stake in the Lula Field, which isBrazil's largest oil and gas producer. Shell retains a 25% minority stake,while Portugal's Galp Energia holds the remaining 10%. The P-69 will becapable of producing up to 150,000 b/d of oil and processing up to 6 millioncu m/d of gas, according to Petrobras.

Fresh production records are also expected in 2017, when Petrobras andits partners developing the subsalt region are scheduled to install three newFPSOs. Petrobras expects to install new FPSOs at the Lula Norte and Lula Sulareas of the Lula Field in 2017, as well as a single floating production unitthat will produce from the sister Tartaruga Mestica and Tartaruga Verdefields.

The FPSO P-66, which will be installed at the Lula Sul area, left theBrasfels shipyard in early February and has already arrived on site, wherework to anchor the vessel and connect the first production well is currentlyunderway.

Petrobras also expects to connect 57 new production and injection wellsin 2017 to FPSOs installed over the past 18 months, which are now undergoingthe ramp-up phase of output development, according to the company. Petrobrasconnected 56 wells in 2016, down from a recent high of 73 wells in 2015.

Brazil will also see an additional boost to output in the fourth quarterof 2017, when a long-term well test is conducted at the subsalt Libra Fieldand independent producer QGEP Participacoes starts an early production systemat the Campos Basin's Atlanta Field.

The FPSO Pioneiro de Libra, which will conduct the long-term well test atLibra, also left the Jurong shipyard in Singapore for Brazil on Tuesday,Petrobras said in a separate statement. The FPSO will be leased by the groupdeveloping Libra, which was Brazil's first subsalt field sold under thecountry's new production-sharing regime. The field is estimated to hold 8billion-12 billion barrels of recoverable reserves.

The Navion Norvegia tanker was converted to an FPSO capable of pumping50,000 b/d of oil and processing 4 million cu m/d of gas, according toPetrobras. The FPSO is expected to arrive in Brazil in early June.

"The FPSO will be the first to operate in the Libra block," Petrobrassaid in the statement. "The long-term well test seeks to reduce risks andoptimize definitive production systems for the area."

Petrobras operates the Libra production-sharing area with a 40% stake,while Shell and Total each retain 20% shares. Chinese state oil companies CNPCand CNOOC also each own 10% minority stakes.

The long-term well test at Libra is expected to start in the thirdquarter of 2017, Petrobras Exploration and Production Director Solange Guedessaid last week.

--Jeff Fick, newsdesk@platts.com

--Edited by Derek Sands, derek.sands@spglobal.com