Phase I of ONGC’s Brazil project starts

Phase I of ONGC’s Brazil project starts
PTI
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First Published: Wed, Jul 15 2009. 04 53 PM IST
Updated: Wed, Jul 15 2009. 04 53 PM IST
New Delhi: State-run Oil and Natural Gas Corporation’s deep-sea project in Brazil has begun crude oil production and output is projected to touch 1,00,000 barrels a day soon.
ONGC Videsh Ltd, the overseas arm of the state-run firm, Shell and Petrobras of Brazil started production on 13 July at its multi-field Parque das Conchas project, also known as BC-10, 120 km off Brazil’s southeast coast, where heavy oil resources lie below nearly 2 km of water in the Campos Basin.
The field is currently producing small volumes but the output will be quickly ramped up to 1,00,000 bpd or 5 million tonnes a year shortly, an official said.
Parque das Conchas is a two-phase project with initial production drawn from three fields: Abalone, Ostra and Argonauta B-West. The first phase, now on-stream, involves nine producing wells and one gas injector well. The second phase will focus on the Argonauta O-North field.
Oil is being produced using a floating production, storage and offloading vessel (FPSO) named Espirito Santo. The FPSO can process 1,00,000 bpd of oil and 50 million cubic feet of natural gas per day, and store nearly 1.5 million barrels of oil for shipment to shore by transport tankers.
The field produces heavy oil, the official said Shell Brasil Ltda is the operator of the project with a 50% stake while Brazil’s state-run Petroleo Brasileiro SA (Petrobras) has 35% interest. ONGC Campos Ltda, a fully-owned subsidiary of OVL, has 15%.
OVL had in 2006 paid $170 million to buy a 15% stake in the Brazilian oilfield from Royal Dutch/Shell. The ONGC subsidiary had originally bought US energy giant ExxonMobil’s 30% stake in BC-10 for $330 million. It had committed another $490 million as its share in the development cost.
However, Shell as the operator of the block had the first right of refusal on any stake sale in the venture by partners. It exercised its pre-emption right and OVL had to buy half of that stake from Shell for $170 million. On top of this, the company was to send another $234 million as its share of the cost involved in bringing the field to production by 2009.
Shell had in November 2006 launched the development of BC-10. The BC-10 development plans involve a phased approach, developing three fields in the first duration, and a fourth one in the second.
The company had previously said it estimates potential oil reserves in the BC-10 block at 400 million barrels.
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First Published: Wed, Jul 15 2009. 04 53 PM IST
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