Shell, BP, Chevron, Ecopetrol, and CNOOC Push Drilling Plans in Brazil’s Pre-Salt

The Two Giant Operators Will Explore The Pau Brasil And Saturn Areas Starting Early Next Year

The two European operators, BP and Shell, presented plans to conduct exploratory drilling in the pre-salt areas of Pau Brasil and Saturn, respectively, with operations in the Santos Basin potentially starting early next year. Both Pau Brasil and Saturn were acquired last September in the fifth round of the pre-salt.

The production sharing contracts were officially signed three weeks ago, and the two companies wasted no time in fulfilling their respective drilling commitments with the federal environmental regulatory agency Ibama.

Chevron and the American division of Chevron revealed ambitious plans to reach five wells in the Saturn area.

It is understood that the campaign is scheduled to start in January 2020 with a single company well, provided that the duo secures the drilling license from Ibama in time.

The four remaining prospects are contingent on the results of the first prospect and may be drilled between mid-2020 and late 2021. In addition to the major Saturn prospect, which is expected to be drilled by the partners next year, a 3D seismic survey has also mapped the Dione structure of the block.

Together, they are estimated to hold unrisked volumes of 6.22 billion barrels of oil.

Shell and Chevron acquired Saturn for a fixed signing bonus of 3.125 billion reais (US$ 826.7 million) and offered a 70.2% share of the government’s profits.

Both companies are cultivating 5% working interest each for the Colombian Ecopetrol in Saturn.

After the completion of this operation, Shell will remain the operator with a 45% stake, while Chevron will hold the other 45%.

In addition to Saturn, Shell has pending applications with Ibama for the drilling of up to five wells in the pre-salt province of the Santos Basin, including three in the Alto de Cabo Frio Oeste area and two in the southern region of Gato do Mato. Shell, led in Brazil by Andre Araujo, has also requested permission to conduct a drilling pathway test in southern Gato do Mato and is trying to obtain a drilling license for three other wells in Block CM-791 in the Campos Basin pre-salt polygon.

Shell has already agreed to charter the drillship Brava Star from the Brazilian contractor Constellation Oil Services, formerly known as Queiroz Galvão Oil & Gas, to conduct campaigns in southern Gato do Mato and Alto de Cabo Frio Oeste.

Meanwhile, BP and project partners, China National Offshore Oil Corporation (CNOOC) and Ecopetrol, have presented plans to drill up to three wells in Pau Brasil.

The program is scheduled to start with the drilling of a well in August 2020, with BP holding an option to explore the other two wells and conduct a summer schedule at a later date.

Pau Brasil, located southeast of the Jupiter pre-salt discovery in Block BM-S-24, is estimated to have unrisked volumes of 3.9 billion barrels of oil on site.

BP operates Pau Brasil with a 50% stake, while CNOOC and Ecopetrol hold 30% and 20% stakes, respectively. The area was acquired for a fixed signing bonus of 500 million reais and a government profit share of 63.79%.

Other companies are also attempting to obtain licenses from Ibama for exploration work in the pre-salt.

Petrobras plans to drill up to six wells in the large area of Alto de Cabo Frio Central, while American supermajor ExxonMobil has applied to drill up to 22 prospects in seven blocks acquired in the latest rounds, including at least one in the Tita area.

Operators hope that the new administration of Brazilian President Jair Bolsonaro will adopt a more pragmatic approach regarding Ibama’s licensing processes, reducing the bureaucratic aspects of environmental licensing and accelerating the exploration of oil and gas.