Oil & Gas - Brazil - Petrobras well-placed in heavy oil pursuit, says report

By Michael Place?/?Business News Americas

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Brazil is on target to fulfill its heavy oil potential despite the threat posed by limited capital and new technology, according to the latest BNamericas Oil & Gas Intelligence Series report.

The 18-page document says an estimated 45% of Brazil's 15.7Bb crude reserves are classified heavy oil, with the majority found in the Campos, Esp?rito Santo, Santos and Potiguar basins.

According to the report, diminishing conventional oil sources have triggered global efforts to exploit heavy oil deposits, once considered unviable due to high drilling costs.

Heavy oil is any type of liquid petroleum that does not flow easily due to its high density and gravity levels.

Brazil's federal energy major Petrobras (NYSE: PBR) expects to increase oil and gas production to 3.99Mboe/d by 2015, with heavy oil accounting for more than 50% of total output, the report said.

"Petrobras' plans are realistic and achievable given the seriousness of the company and its mandate to commercialize its pre-salt resources," the report said.

Future heavy oil production is expected to be focused on the Campos basin's deepwater fields off the coast of Rio de Janeiro.

They include Marlim Sul Module 3 (100,000b/d capacity), Papa-Terra Modules 1 and 2 (150,000b/d), Jubarte Phase II (180,000b/d) and Maromba (100,000 b/d).

According to consultancy IHS CERA, Latin America has the world's highest proportion of unconventional hydrocarbons, with 45% of total reserves comprising heavy oil.

Venezuela is the regional leader with 2.2Tb followed by Mexico (137Bb), Brazil (16Bb) and Colombia (12Bb).

"A lack of capital and new technology could slow development given the complexity of the tasks at hand and the intensive capital investments required," the report said.

"As long as oil prices remain robust and worldwide supply issues prevail, the potential to report reserve discoveries and increase heavy and extra-heavy oil supply in Latin America remains an attractive alternative."

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