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The search for new giant fields was the central theme of the last panel of the 2nd Pré-Sal Petróleo Technical Forum, and one of the common grounds among the panelists was that Brazil has a relevant role in the scenario of future discoveries.
The panel featured Pedro Zalan, director of Zag Consultoria; Ricardo Bedregal. Research and Consultancy Officer at IHS Markit; José Mauro Coelho, director of Oil, Gas and Biofuel Studies at the Energy Research Company (EPEJ); and Samir Awad of the Management, Control and Finance Board, which acted as a moderator.
The pre-salt exploration potential, in addition to the impact on industry geopolitics, may be analyzed with other questions such as restrictions in infrastructure and logistics, the competitiveness of Brazilian industry and expectations regarding the speed of monetization of new oil and natural gas discoveries, says Awad.
According to him, within a decade, pre-salt has increase from around 100 thousand barrel per day to around 2 million barrels per day, an ever-increasing speed which reveals the importance of investments into infrastructure for, for example, infrastructure investments aimed at, for example, gas and oil outflow. And, as previously warned, some bottlenecks have already been experienced, and will increase with future discovered reserves. "It is impossible to produce 2 million in 10 years without enduring a growth process.
Pedro Zalan brought the potential for new pre-salt reserves into the discussion, in excess of the limits of known production areas and exploration blocks granted thus far (ultra-boundaries). Up to this moment, Petrobras has already discovered, in the pre-salt layer, around 40 billion barrels of recoverable oil equivalent among proven and contingent resources, but, according to him, this unexplored potential is extraordinary. By considering the lower amount of the estimated uncertainty range of some of the largest mapped prospects, something between 20 and 30 billion of equivalent oil barrels may be found in ultra-boundary areas. The two largest mapped complexes were Puri (3.3 thousand km² ) and Xavante (5 thousand Km² ), located beyond the 200 nautical mile mark. Puri is already set for the 17° Round of ANP. "The possibility of discovering giant and super-giant fields at ultra-boundaries exists, and is a likely one", he says.
Ricardo Bedregal brought up issues related to the future of the Brazilian oil industry within an increasingly challenging global landscape, and summed up by showing that Brazil has the conditions required, both for short and long term, to be relevant in the international market. Among the variables mentioned that may affect oil demands and prices and, therefore, invaluable for analyzing the Brazilian position in the industry map, are: the global landscape, such as the increase in production and exports from the United States and the agreement between OPEC and the Vienna Club, which led to a decrease in production and subsequent pressure on prices; the political and economic scenario in Latin America, changing the oil geopolitics in the region; and the recent reforms in Brazil. Bedegral pointed out that the international situation has been putting pressure on oil prices, particularly due to the decrease in pace of global economic growth and its effects over the oil and gas demands. If prices are maintained for the next two years, the American production shall tend towards stabilization, or even a fall.
Brazil, according to Bedegral, is well prepared, carrying out all possible reforms in order to increase competitiveness and the dynamism of the oil industry. "There are still challenges to be overcome, but this has clearly changed the risk perception of Brazil in relation to the global industry", he said, referring to a survey of the positions of Latin American countries in the oil and gas sector, based on political, legal and economic aspects.
"Before the reforms, Brazil was placed 52nd, compared to other countries. Now, it is placed 41st, showing a competitive advantage compared to its neighbors", he concluded. But there are challenges, among which is the exploitation of the competitiveness of the pre-salt gas, surpassing current restrictions.
The challenges for the outflow infrastructure in maximizing value of pre-salt oil and gas reserves was the main theme approached by José Mauro Filho, from EPE. Brazilian natural gas production, according to EPE forecasts, should experience a significant growth until 2030, spearheaded by the production of pre-salt oil fields. Nevertheless, there are still challenges to be faced. In 2018, Brazil produced 2.6 million barrels of oil a day, and EPE forecasts a 5.5 million barrel production by 2030. In other words, the output will be doubled within just 10 years, launching Brazil to one of the top 5 oil producers and exporters in the world, at over 3 million barrels a day. Which is more than the current production. Special attention is required, therefore, for investments in proper logistics and infrastructure, in order to secure value generation of future production.
Regarding natural gas, EPE forecasts 261 million cubic meters of gross production in 2030 (last year was about 112 million cubic meters/day). Despite positive numbers, there are challenges for this offer of natural gas. One of the main challenges, according to Coelho, is in effectively monetizing pre-salt gas.
"There are challenges regarding CO2 contents. Many pre-salt fields have different CO2 concentrations than other regions, with specific features, and may comprise up to 80% of gas composition", he states, adding that the Brazilian agenda for 2030 should include investment in technologies that enable mitigation of the increased CO2 contents in natural gas on new fields, and infrastructure to balance outflow bottleneck issues and the distance between the oil fields and the coast.
Ricardo Bedegral Research and Consultancy Officer at IHS Markit, at the 2nd Pré-Sal Petróleo Technical Forum
Credit: Guarim de Lorena