The Campos Basin, the old lady from where the oil production began in Brazil in the 70’s, will undergo a renovation phase that will require new investments in equipment and platforms. According to data from the National Petroleum Agency (ANP), 22 platforms installed in Campos already have more than 25 years of operation and will have to stop in about five years.
Across the country, 42% of the 158 platforms between the Northeast and Santos basins, or 67 units, are in this situation, explains Marcelo Mafra, executive manager of the agency’s operational and environmental safety. This group also includes 21 platforms in the Sergipe-Alagoas Basin and about 10 in the Potiguar basin, in Rio Grande do Norte.
In order to renew or permanently paralyze production in mature fields, industry encounters a tiny enemy, the sun-coral, a species that is scattered along the Brazilian coast and competes with other species of coral, and can kill them. According to biologists, the sun-coral arrived in the country in the 1980s. It is found in places with large movements of drilling platforms and oil production and represents a potential increase in costs and headaches for the oil sector.
To extend the useful life of mature fields still economically viable – where oil has been extracted for two or three decades, but there are still reserves – or to stop production definitively it is necessary to remove the installed equipment. The process requires from the cementing of wells with new drilling, the removal of submarine platforms and equipment. Both the renovation and the return of the areas entail costs. In industry, the process is called decommissioning. Obsolete and worn equipment must be removed and discarded in a safe place, obeying regulations of Ibama, ANP and the Navy.
According to the ANP, there are currently six offshore platforms and three terrestrial pipelines in decommissioning phase. Three other fixed platforms currently in the Cação field, in the Campos Basin, had decommissioning applications approved by the agency.
There is no cost forecast for this decommissioning in Brazil, but a projection by the Wood Mackenzie consultancy for the Asia Pacific region is that $ 100 billion will be spent in that region over the next decade. Here the industry concern is that there is still no rule on how to deal with coral-sun and other issues involving the deactivation of fields and platforms.
Environmental officials want to prevent sun-coral, considered a bio-invasive species, from being lifted to the surface along with equipment that has been replaced or will be discarded. The goal is to prevent the removal of equipment to bring the intruder into the surface embedded in a platform or production lines installed 30 or 40 years ago.
“You cannot leave any environmental liabilities there, you have to clean up that area and there are rules for cleaning, the other possibility is to make an artificial reef, like it has been done in some places in the world. Aware to know if what was left behind can produce some damaging effect on the environment in the next years, “says Telmo Ghiorzi, director of the Brazilian Association of Petroleum Services Companies (Abespetro).
Some of the aging rigs that are expected to stop production in the next few years are installed in shallow water, where the sun-coral can develop, and others are in the Campos Basin, in deep waters, where it does not survive due to the low temperatures . “Between 2018 and 2022, companies will have to make a decision, either to decommission the areas to return or to extend the life of the facility,” explains Mafra of the ANP.
The company with more mature projects is Petrobras, the pioneer of exploration and production in Brazil, but Shell also operates areas that are becoming mature, such as the Bijupira-Salema field. Another that has a field acquired in the so-called Round Zero in 1999 is Chevron, operator of the Frade field.
The ANP is currently analyzing the processes for returning 41 fields, of which 15 are offshore and 26 are onshore. According to the agency, it is not yet possible to determine how many facilities in each of these fields will be withdrawn. The expectation of new investments in the Campos Basin, which has already produced about 12 billion barrels of oil, occurs at a time of aging of the equipment installed in the 70’s and 80’s.
The volume already produced equals two-thirds of proven reserves in the Campos Basin. The commitment of the director general of the agency, Décio Oddone is that with the permanent offer of areas (already offered in auction), and modernization will be possible to extend the useful life of the fields. On average, 24% of the oil accumulated in the reservoirs was extracted, in Norway the fraction recovered varies from 38% to 67%.
According to Oddone’s calculations, every 1% increase in the recovery factor of the Campos Basin will require investments of R $ 16 billion that will generate R $ 11 billion in royalties. “We are going to accelerate the resumption of activity in Campos. The first step should be to include blocks in this basin in the permanent round,” says Oddone.
Source: Valor | Claudia Schüffner