Rio de Janeiro — Brazilian state-led oil company Petrobras will pump first oil from the Mero Field in the Libra production-sharing area in the first quarter of 2022 amid delays in building the field's first floating production unit, the company said April 7.
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"The FPSO is going through conversion in China and, because of the COVID-19 pandemic, there were delays in work on the unit, with a subsequent adjustment in the project's timeline," Petrobras said. The company had said Feb. 25 that it expected the FPSO Guanabara floating production, storage and offloading vessel to pump first oil in the fourth quarter of 2021, likely close to the end of the year.
The Mero Field will be the first one from the Libra production-sharing area to enter production. The Libra production-sharing area was the first subsalt acreage sold under Brazil's production-sharing regime in 2013. Petrobras owns a 40% operating stake, with Shell and Total each retaining 20% minority shares. China's CNOOC and CNPC each own 10% equity.
The delay was somewhat unexpected given that shipyards in Asia, especially in China where the FPSO Guanabara is under construction, had made up much of the time lost to coronavirus shutdowns since largely containing the pandemic in mid-2020. Petrobras, however, had warned during a conference call to discuss fourth-quarter and full-year 2020 production and earnings results that the pandemic could still undercut projects.
China has largely been able to tamp down secondary outbreaks since the pandemic started in January 2020, standing in stark contrast to Western countries that have had to implement multiple waves of lockdowns and other social-distancing measures to counter successive waves of the outbreak.
Brazil, for example, has turned into the epicenter in the global pandemic over the past two months. Infection rates and the death toll have soared after a virulent variant of the coronavirus emerged in the Amazon jungle city of Manaus in January. The variant has quickly spread around the globe and pushed Brazil's coronavirus-related deaths to record highs in March. Fresh records are expected in coming weeks.
While oil companies operating in Brazil have been able to avoid widespread shutdowns at offshore installations, local oil workers unions have noted serious outbreaks at several offshore facilities since February.
ORGANIC PRODUCTION GROWTH
Despite the delay, Petrobras should still be able to squeeze out some freshly sourced barrels in 2021.
Petrobras still expects the FPSO Carioca to pump first oil from the Sepia Field, which is located in the subsalt transfer-of-rights area. First oil is expected from Sepia in the first half of 2021, likely closer to mid-year. The vessel arrived in Brazil for module installation in February.
Both the FPSO Guanabara and the FPSO Carioca have installed capacity to pump 180,000 b/d, according to Petrobras. FPSO operator MODEC is building and will operate both vessels for Petrobras.
In addition to the FPSO Carioca, Petrobras also expects to ramp up production from the FPSOs P-68 and P-70 during the year. The FPSO P-68 was installed at the Tupi Field, while the FPSO P-70 was installed at the Atapu Field. Both vessels pumped first oil in late 2019, with ramp-up periods taking about 12 months-18 months to complete.
Petrobras set a 2021 production target of 2.72 million b/d of oil equivalent, which would be down slightly from 2.84 million boe/d in 2020. Petrobras expects output to retreat as it continues to shed assets under a divestment program that is expected to raise $25 billion-$35 billion in the 2021-2025 period.
The company currently has about 50 assets up for sale, including stakes in important mature producers such as Albacora, Albacora Leste and Marlim.