Oswaldo A. Pedrosa Jr. Pre-Sal Petroleo SA - PPSA - FIDIC 2014 - Plenary... · prospective...
Transcript of Oswaldo A. Pedrosa Jr. Pre-Sal Petroleo SA - PPSA - FIDIC 2014 - Plenary... · prospective...
The New Production Sharing Regime for the Brazilian Pre-Salt
Subjects
1. Pre-Salt: History and Expectation
2. New Regulatory Regime for the Pre-Salt
3. PPSA’s Focus
4. Final Remarks
Pre-Salt Region very large reservoirs trapped underneath giant salt layers in Campos and Santos Basins
PRE-SALT: HISTORY AND EXPECTATION
Santos Basin
Campos Basin
Santos Basin
• Deepwater pre-salt fields under accelerated development
• Largest potential recoverable resources in Brazil
Campos Basin
• Currently most productive region in Brazil
• Production takes place for more than 35 years
Brazil’s expected oil production to reach over 4 million bpd(*) in 2020, mostly from pre-salt reservoirs in Campos and Santos Basins
(*) WEO 2013 - IEA
In July 2014 oil production in the pre-salt reached 546 kbpd (*)
(*) Petrobras
PRE-SALT: HISTORY AND EXPECTATION
Brazil: in the last ten years, super giant fields have been discovered in Campos and Santos Basins, much more than in any oil province in the world
Current estimation: remaining recoverable resources (*) of 106 billion barrels of oil, 72% coming from Campos and Santos Basins, mostly from deepwater pre-salt
(*) includes reserves, contingent and
prospective resources
Brazil: huge potential for new discoveries 88% of ultimately recoverable resources remain to be produced
PRE-SALT: HISTORY AND EXPECTATION
THREE REGULATORY REGIMES GOVERNING E&P ACTIVITIES IN BRAZIL
Concession Regime
Established in 1997 by Law 9.478
Bid rounds needed for licensing
No mandatory state participation
Oil production belongs to concessionaires after payment of royalties and taxes
Regime for Transfer of Rights to Petrobras
Established in 2010 by Law 12.276
Licenses granted to Petrobras for Franco prospect (now Buzios Field) and surrounding areas
Government capitalization of Petrobras with a direct transfer of rights to produce up to 5 billion boe
Established in 2010 by Law 12.304 and Law 12.351
Applicable to areas not granted to concession in the Pre-Salt Polygon of Campos and Santos Basins
Production Sharing Regime
THE NEW REGULATORY REGIME IN THE PRE-SALT
Production Sharing Agreement (PSA)
PRODUCTION SHARING REGIME
Main players:
o Petrobras: operator with at least 30% participation
o Non-operators: partners in the Consortium
o PPSA: consortium member representing the State’s interests in the PSA
o ANP: manages the bid rounds and regulate the production sharing agreements
Share of profit oil offered to the State
Qualified expenses for cost oil recovery: need to be approved by PPSA
Percentage of monthly recovered cost: established in the tender protocol and in the PSA
Royalties: 15%
License granted to consortium through tender
License granted directly toPetrobras
THE NEW REGULATORY REGIME IN THE PRE-SALT
THE NEW REGULATORY REGIME IN THE PRE-SALT
Chair the Operating Committee with 50% vote
and veto power
Manage and audit the project execution for
exploration, appraisal, development and
production
Monitor and audit the operating costs and
capital expenditures
Approve qualified expenditures for cost oil
recovery
Perform technical and economic analysis of
plans and programs to be executed in each PSA
Make sure the local content commitment is
accomplished
PPSA’s Roles
Total Production
Governmental Share of Profit OilCost Oil
Profit Oil
Royalties
Active role on PSA decision making process
Projects of high technological and operational complexity
PPSA´s need for a highly qualified and
experienced team
Management of PSA’s for surplus volumes from Transfer
of Rights to Petrobras
Management of Libra PSA
Government Representation in Production Unitization
Agreements
PPSA’S FOCUS
PPSA’S FOCUS
Oil Discovery:Well 2-ANP-002A – RJS27 °API oil and GOR of 410 to 450 m³/m³High productivity: 3667 bopd (choke 32/64”)
Estimate Resources: 8 to 12 billion boe(*)(*) Source: ANP
Libra PSA
Bid Round in Oct 21, 2013
Signature Bonus: R$ 15 billion
Winner Consortium:Petrobras (Operator) .... 40%
Shell Brazil ..................... 20%
Total Brazil ..................... 20%
CNODC Brazil ................. 10%
CNOOC Brazil ................. 10%
Signing of PSA: Dec 02, 2013
Government Share in Profit Oil:
41.65% for average productivity of 12 kboe/d and oil price of US$ 100/bbl
Actual percentage adjusted monthly based on average well production and oil price
Percentage of Cost Recovery:
50% in the first two years and 30% thereafter
LIBRA PROJECT
PPSA’S FOCUS
Areas Surplus VolumesBillion boe (*)
Franco (Buzios) 6.5 to 10.0
Iara Surrounding 2.5 to 4.0
Florim (Itapu) 0.3 to 0.5
NE Tupi (Sepia) 0.5 to 0.7
Total 9.8 to 15.2
Areas VolumesBillion boe
Franco 3.058
Iara Surrounding 0.600
Florim 0.467
NE Tupi 0.428
S Lula 0.128
S Guara 0.319
Total 5.000
Transfer of Rights to Petrobras(Contracted volumes in 2010)
PSA’s directly granted to Petrobras for surplus volumes
Key issues
o Very large potential resources with low risk
o 17 wells already drilled in the four areas totaling 2,046 km²
o One field already being developed (Buzios) and the other three areas in appraisal
o First oil of transfer of rights surplus in 2021
Contract Requirements
o Signature bonus of 2 billion R$
o Forward payment of part of the Government share of profit oil in 2015-2018, if requested by the Federal Government
o 35 yrs contract
PPSA’S FOCUSGovernment Representation in Unitization Agreements
Campos Basin
Santos Basin
Cases of oil discoveries in areas already leased
(Concession Regime) where reservoirs extend over non-contracted areas in the Pre-
Salt Polygon
PPSA’s role: represent the Federal Government in the
unitization agreements
Unitization Agreements Current Activities
o Engagement with Petrobras to get a common understanding on technical aspects of the following cases of unitization: Lula , Sapinhoá and Carcará (Santos Basin) and Tartaruga Mestiça (Campos Basin)
o Engagement with Shell to get a common understanding on technical aspects of a case for unitization in Gato do Mato (Santos Basin)
PPSA’S FOCUS
Deepwater production development in Brazil based primarily on floating production units and subsea completion
Main region for growth in global FPSO development
Brazilian shipbuilding industry growing fast (more than 80,000 people employed up to 2014, more than three times the number in 2006) (1)
Around 70 FPSOs will be operating in Brazil by 2020 (2)
22 contracted FPSOs today (2)
12 hull conversions (6 in Brazil and 6 outside)
10 new builds contracted (8 in Brazil and 2 outside)
Supply Chain Market on Focus
FINAL REMARKS
(1) Sinaval 2012
(2) IEA 2013
Forecast of US$ 285 billion to be invested in the O&G business in the period 2013-2016 (*)
Petrobras’ share on O&G local investment is 79% and 21% for the other oil companies
(*) Petrobras and IBP
Supply Chain Market on Focus
Scale of investment in O&G business in Brazil need for policies to create long term value and
employment in the local industry
Local Content Requirement
Challenge how to conciliate fast-track development with high local content
requirements in a tight supply chain market
FINAL REMARKS
FINAL REMARKS
Technological and Operational Complexity
Deepwater Pre-Salt Development highly attractive environment for technology development and
innovation
Use of new technology for improving seismic imaging underneath the salt
Impact of subsurface uncertainties (reservoir quality, heterogeneity, and connectivity) on project development
Performance of improved recovery methods, particularly water-alternating-gas (WAG)
Drilling of thick salt layer requires advanced technology to avoid wellbore creeping and deformation
Need for high capacity drilling rigs
Extensive use of remotely operated vehicles in harsh deepwater environment
Complex logistics for platform supply at long distances from shore
Handling and treatment of associated gas with high CO2 content in FPSO plants
Need for fit-for-purpose floating production units
Key aspects of operational complexity
Deepwater Pre-Salt Development among the most complex projects in the global O&G industry