Presalt reserves in Brazil are some of the most promising worldwide, with E&P activity flourishing since the first discoveries were made in 2006.

According to the National Agency for Oil, Natural Gas and Biofuels of Brazil (ANP), in August 2015 Brazil produced a record 2.5 MMbbl/d of crude oil and almost 99.2 MMcm/d (3.5 Bcf) of natural gas, resulting in a total of 3.2 MMboe. The share of production from presalt resources, found under a thick salt section thousands of meters below the ocean’s surface, continues to increase. Crude oil production from the presalt reservoirs is now 33.7% of total production, a significant increase from the 15% in 2013. Similarly, Brazil’s presalt natural gas production represents 33% of total gas production, up from 14% in 2013.

Exploration and development of Brazil’s presalt layer began in and around the Tupi Field (now Lula) almost 10 years ago, with first production in 2009. Further exploration discovered huge hydrocarbon deposits in the presalt layer spread through the Santos, Campos and Espirito Santo basins. Pilot projects in the Lula and Sapinhoa fields began production in 2009 and 2010, respectively.

Repsol’s E&P activities
Repsol’s presalt operations in Brazil are carried out under an agreement that was signed between Repsol (60%) and Sinopec (40%) in 2010, which led to the creation of the company Repsol Sinopec Brazil (RSB), one of the largest private independent energy companies in Latin America. RSB has a strategic position in the highest potential presalt areas and significant exploratory activity in the prolific Santos Basin.

The exploratory discoveries made in Brazil in recent years, the development projects in progress and Repsol’s alliance with Sinopec have been one of the key factors to rapid growth in Repsol’s upstream operations and continue to be so. In fact, the company’s success in the region contributed significantly to its reserve replacement ratio of 118% in 2014. RSB has a large and diversified portfolio of assets in the region that includes Albacora Leste and Sapinhoá (BM-S-9) producing fields; Lapa Field (BM-S-9), which will start producing in 2016; and BM-C-33 and BM-S-50 blocks, where major discoveries have been made in recent years.

Commercial exploitation of Sapinhoá began in January 2013, when the first well started to produce. The second well began to produce in mid-February 2014, while the third and fourth wells started production in July 2014. Some of the Sapinhoá wells are among the most productive in the presalt, with daily rates of more than 44,000 boe/d (ANP August 2015 Report), allowing the field to achieve the maximum capacity (120,000 bbl/d) of the first FPSO unit Cidade de São Paulo. In mid-November 2014 production began in the northern section of Sapinhoá with the FPSO unit Cidade de Ilhabela. It is expected that by year-end 2015 this northern section of the Sapinhoá megafield in Block BM-S-9 will see production reach 150,000 bbl/d.

In June 2014 the ANP was presented with the plan for the development of the northeast of the other large discovery in Block BM-S-9, Lapa, formerly known as Carioca. It is estimated that production in Lapa will start at year-end 2016.

Several months before, in November 2013, the ANP approved the appraisal plan presented by RSB as operator of Block BM-C-33, which comprises three discoveries: Seat (2010), Gavea (2011) and Pão de Açúcar (2012). In November 2014 the company started ultradeepwater drilling operations in the Seat-2 appraisal well using the seventh-generation drillship Ocean Rig Mylos. This is one of the largest floating rigs currently available and is capable of drilling in water depths of up to 3,700 m (12,139 ft).

Seat-2 resulted in a discovery of a significant oil column in a good-quality reservoir. Shortly after the success of Seat-2, in January 2015 the ANP was informed of the positive preliminary results of the first appraisal well in the Pão de Açúcar Field. And at the Sagitário discovery well in Block BM-S-50, a production test was carried out at year-end 2014 with positive results that confirmed the potential of this accumulation.

Moreover, at year-end 2014 the ANP was presented with an application for an extension of the concession agreement for the Albacora Leste productive field, in which RSB has a 10% stake, for an additional 27 years (from 2025 to 2052).

Industry challenges
While Brazil’s presalt reserves are set to become one of the world’s most fruitful worldwide, they have presented some of the toughest challenges for the industry. The technological viability of the presalt plays has been the result of operator experience gained through overcoming the challenges of constructing wells in deep and ultradeep waters. Equally significant are the investments and improvements that have been made to seismic imaging, allowing geophysicists to identify potential structures
masked beneath an extremely thick layer of salt. Repsol has made significant investments in this regard, including in its toolbox Kaleidoscope, a seismic imaging tool that has given the company better images of the reservoirs and faster data processing than competitors. This has been key to an above-average drilling success rate in deep water (24% vs. 16% industry average).

Moving farther ahead
The success and experience of operating in Brazil’s presalt environment is now being applied elsewhere as it has been recognized that the pre-drift geology and tectonics of the basins along the southeast coast of South America could be similar to those of the basins along the west coast of Africa. This has led some operators, including Repsol, to establish a presence along both coasts; for example, Repsol has stakes in three deepwater exploration blocks in Angola that have shown promising
results. As Repsol continues to invest and apply its exploration strategies, Brazil continues to emerge as one of the most promising regions worldwide.

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