Must-know: Petrobras’ exploration and production project plans

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Oct. 10 2014, Updated 12:00 p.m. ET

Exploration and production plans

In its plans for 2014–2018, Petrobras (PBR) disclosed a total of ~$154 billion in investments for Brazil. The investments are for ~30 billion annually. In 2013, Petrobras invested a total of $7.8 billion in exploration activities in Brazil. It drilled ~76 exploratory wells—31 were offshore and 45 were onshore. Asset chart

PBR focuses on exploration and production activities in the pre-salt reservoirs in the Campos Basin. The pre-salt province consists of a 149,000 square kilometers covering the Campos to the Santos Basins. PBR’s existing contracts in this area cover 22.2% of the pre-salt areas.

A pre-salt reservoir is “a geological formation containing oil or natural gas deposits located beneath a salt layer.”

Campos Basin projects

The Campos Basin is the most prolific oil and gas basin in Brazil. It’s a significant part of PBR’s production portfolio. It accounts for 75% of PBR’s total production in Brazil. The area also represented ~72% and ~41% of PBR’s total proved oil and gas reserves, respectively.

During the first half of 2014, PBR started two new production units in this basin. It increased its production to four units. The total crude oil capacity of these four units are 680 million barrels of oil per day (or MMBbl/d) and 671 million cubic feet per day (or MMcf/d) of natural gas.

Three of the four units are floating production and storage offloading (or FPSO) units.

Santos Basin projects

The Santos Basin is a prolific offshore exploration and production area in Brazil. Two of its current projects include:

  1. The FPSO Cidade de Ilhabela with a production capacity of 150 MBbl/d of oil and 211.9 MMcf/d of gas. This project is expected to be operational by the second half of 2014.
  2. FPSO Cidade de Mangaratiba, with a production capacity of 150 MBbl/d of oil and 282.5 MMcf/d of gas.

Key stocks and exchange-traded funds (or ETFs)

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Other major integrated energy operators include BP Plc. (BP), ExxonMobil (XOM), and Chevron Corporation (CVX). CVX and XOM are components of the Energy Select Sector ETF (XLE). BP faced significant operational issues in its offshore activities in the past. Read our article on BP’s Deepwater Horizon event here.

Like other integrated energy companies, PBR has a strong refining segment. We’ll discuss the Refining segment’s performance in the next part of the series.

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