Oil Companies Exxon and Equinor Plan to Invest 8 Billion Dollars in Oil Extraction at the Bacalhau Field in the Santos Basin

The First Oil Extraction from the Field in the Santos Basin, Operated by Equinor, Exxon, and Petrogal, is Expected in 2024

Yesterday, oil companies Equinor, ExxonMobil, and Petrogal Brasil announced that they will move forward with the development of the oil discovery at the Bacalhau field in the Santos Basin, with investments of around US$ 8 billion. The first oil from the field, which will be operated by the Norwegian Equinor, is expected in 2024, and production is projected to reach 220,000 barrels per day, the companies said in a joint statement. See also: Exxon, Enauta, and Murphy Oil Companies to Drill First Oil Well in the Sergipe-Alagoas Basin Next Semester

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Bacalhau Field in the Santos Basin – Exxon, Equinor, and Petrogal

In 2012, Equinor acquired the oil asset from Petrobras (located in the pre-salt polygon) for most of the project – discoveries of Carcará and Guanxuma – present in the BM-S-8 concession agreement. Subsequently, an extension of the field in the Carcará North area was contracted under the sharing regime.

The development plan was approved by the National Agency of Petroleum, Natural Gas, and Biofuels (ANP) in March 2021. Equinor operates the project with 40%, ExxonMobil holds 40%, and Petrogal Brasil holds the remaining 20%. The state-owned Pré-sal Petróleo SA (PPSA) acts as the representative of the Union in the sharing agreement.

Exxon, Equinor, and Petrogal Oil Field Has Low Break Even

Veronica Coelho, executive in charge of Equinor’s operations in Brazil, says that the Bacalhau oil field in the Santos Basin is an important step in realizing the strategic ambition to deepen their presence in Brazil. Coelho adds that it is a significant project for the country as it represents substantial investments, with a cascading effect on the supply chain and the creation of local jobs.

Arne Sigve Nylund, executive vice president for Projects, Drilling, and Procurement at Equinor, states that the Bacalhau field is a globally competitive project with a break even below $35 in a key energy region. According to him, the estimated recoverable reserves for the first phase are over one billion barrels of oil.

First Oil Extraction from the Field in the Santos Basin

The expectation is that the first FPSO from the oil field in the Santos Basin will begin operations in 2024. The multinational MODEC has been contracted to build the unit, and a second platform may be ordered – the decision announced on the 1st pertains only to the first FPSO. The unit was contracted under a BOT (build, operate, transfer) modality. In addition to building the unit, MODEC will operate the platform for one year, after which Equinor will take over with its own personnel.

The Bacalhau oil field is situated between two licenses, BM-S-8 and North Carcará. The resource is a high-quality carbonate reservoir, containing light oil, with minimal contaminants. The drainage network plans to connect 19 subsea wells to the floating production, storage, and offloading (FPSO) unit, with a capacity to process 220,000 barrels of oil per day. All gas produced in this first phase will be injected into the reservoir.