[Brazil] Maromba

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escveritas
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[Brazil] Maromba

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The Maromba discovery is located approximately 100 kilometers offshore in the southern part of the Campos Basin. The water depth in the area is approximately 160 meters. Maromba lies within a 375 square kilometer "ring-fence" carved out of the former BC-20 exploration block, called the BC-20A concession. Nine wells were drilled in the license between 1980 and 2006, and oil has been found in eight of these across various reservoirs including in the Eocene, Maastrichtian, Albian, Aptian and Barremian levels.

To the east of Maromba lies the Papa Terra Field operated by Petrobras, which was also carved out of the BC-20 exploration block. It is currently producing 16° API oil from an Upper Cretaceous Maastrichtian interval similar to that found in Maromba. The Peregrino Field operated by Equinor lies to the north and is currently producing 14° API oil from the Maastrichtian sandstone.

Following the successful experience at Dussafu, BW Energy plans to develop the Maromba license in phases, thereby minimizing up-front capital expenditure, accelerating time to first production and allowing the production and the supporting organization to grow organically. Phasing will also provide important reservoir performance data which will be used to optimize future development phases.

Phase 1 will target heavy crude oil at API gravity of 16° but with low relative viscosity and sulphur content in the Maastrichtian reservoir. It will consist of three horizontal subsea wells that will be tied back to an FPSO. The wells will be completed with electric submersible pumps (ESPs). Based on Final Investment Decision (FID) being made in the second half of 2022, Phase 1 is expected to begin production in 2025 and will require gross field investments of approximately USD 400 million, based on preliminary estimates.

The Maromba Field Development Plan was submitted to ANP in December 2019 and was approved in August 2020. The Environmental Baseline Survey was completed in the first quarter of 2021 and the Environmental Impact Assessment was submitted to IBAMA in the third quarter of 2021.

Phase 2 development is expected to consist of three to four additional horizontal production wells and two water injectors.

Future upside development may entail further infield drilling into the Maastrichtian reservoir and satellite reservoirs that contain known oil in the Eocene and Maastrichtian. In addition, evaluation of the abundant prospective carbonate reservoirs in the Albian, Aptian and Barremian is envisioned.

BW Energy's combined plans for Dussafu and Maromba are estimated to lift net production to BW Energy to more than 50,000 barrels per day in 2025, from a very solid reserve base.

BW Energy Maromba do Brasil Ltda currently holds 100% operated working interest. Magma Oil holds a 5% back-in right in the Maromba license which they are expected to execute upon first oil.
escveritas
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Re: [Brazil] Maromba

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Proceeds with phased Maromba development and agreement to purchase FPSO
22.04.2022

Proceeds with phased Maromba development and agreement to purchase FPSO



BW Energy has decided to proceed with the Maromba development project offshore Brazil and signed an agreement to purchase the FPSO Polvo from BW Offshore. The FPSO will be upgraded and redeployed on the field. The development plan is based on an initial drilling campaign of three wells with planned first oil in 2025 and a second campaign with a further three wells in 2027. The investment decision is subject to certain conditions precedent, including completion of the project financing.

Highlights:
  • Phased subsea development with six production wells and tied back to a redeployed FPSO
  • First oil from Phase 1 planned in 2025
  • Expected peak oil production of 30-40,000 barrels per day
  • Agreement to purchase FPSO Polvo for a total consideration of USD 50 million
  • Plan for efficient FPSO refurbishment and life extension established
Unlocking material production

“We have worked to optimise the Maromba development plan since the acquisition in 2019 and during the Covid-19 pandemic. This includes technical evaluations, full-spectrum analysis of geological, seismic and well data, as well as extensive reservoir modelling and simulations. Based on our findings, we have decided to proceed with a development with six horizontal production wells connected to a FPSO to unlock significant oil production and long-term value generation for our stakeholders,” said Carl K. Arnet, the CEO of BW Energy.

A development in stages enables improved reservoir monitoring and optimisation of the second drilling campaign. Total oil production at peak is expected between 30-40,000 barrels per day. The technical evaluation revealed that water injection is not required for the first three wells and is a contingency for the second drilling campaign. Extensive work has also confirmed that Dual Electric Submersible Pumps offer the best artificial lift solution with extended life and reduced workover frequency. The subsea layout has also been enhanced to reduce costs and facilitate future expansions.

FPSO Polvo – “A near perfect fit”

FPSO Polvo recently ended its charter on the Polvo field in Brazil, which is located close to the Maromba field and has similar oil and reservoir characteristics. An assessment of refurbishment costs has been completed and discussions with relevant shipyards are well underway. The FPSO will be designed for up to 10 production wells with 1.2 million barrels of storage capacity. The total liquid capacity will be 85,000 barrels per day with oil production capacity of 65,000 barrels per day and water treatment capacity of 75,000 barrels per day.

BW Energy has signed an agreement to purchase the FPSO from BW Offshore effective no later than July 24, 2023, for a total consideration of USD 50 million. The valuation of the FPSO has been confirmed by an independent third party. The agreement to purchase the FPSO, instead of entering a traditional lease and operate contract, is a consequence of related- and associated-party tax legislation in Brazil.

Final Investment Decision (FID)

“The FPSO Polvo is a near perfect fit for Maromba. We know the vessel well and have extensive in-house competencies and capabilities in planning and executing such a repair and life extension project. Re-using existing energy infrastructure enables reduced investments, shorter time to first oil and significantly reduced CO2 emissions in the development phase as compared to installing new production assets,” said Carl K. Arnet.

“We are also mindful of the inflationary pressures affecting our industry as we progress contract discussions with the shipyards and for other long-lead items. We are also evaluating financing alternatives for the field development plan and see strong interest from various sources,” Arnet continued.

The FID is subject to completion of the financing for the project. The Brazilian regulator, ANP, has approved the development plan and the Company expects to receive full IBAMA environmental approval in due course.

Maromba Field

Maromba is located off the Brazilian coast in the Campos Basin in approximately 160 metres of water depth. Nine wells were drilled in the license between 1980 and 2006, and oil was found in eight of these across various reservoirs. Gross 2C reserves in place are estimated at 467 million barrels with approximately 100 million barrels estimated as recoverable volumes. BW Energy acquired 100% ownership in Maromba in 2019 for a total of USD 115 million, of which USD 85 million remains to be paid to the sellers at predefined milestones.

The Company will provide further information on the Maromba development plan in connection with the first quarter 2022 earnings release on 27 May.
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