Cooperation between Libra consortium partners reduces project's break-even price
RIO DE JANEIRO -- Intense collaboration between the Libra area’s partners to develop technologies needed to maximize value has cut the project’s break-even price by approximately $13/bbl. This information was provided by Petrobras executive manager Fernando Borges, who took part in a panel discussion entitled Libra Project: Reducing Break-even and Preparing for First Oil, during the 2017 Offshore Technology Conference in Houston, Texas.
Actions mapped by the Libra Consortium to cut the break-even price have focused on reducing costs and increasing the recovery factor (the percentage of oil in a reservoir that it is financially viable to extract). These measures are part of the Libra @35 project, which seeks to achieve a breakeven price of $35/bbl. This project’s initiatives were mentioned by executives at OTC as key factors for Libra’s competitiveness in a context of low oil prices.
Loosening of domestic content requirements. Another aspect mentioned as being fundamental to competitiveness is the approval by the National Oil, Gas and Biofuels Agency (ANP) of a waiver request concerning domestic content requirements for the floating production, storage and offloading vessel (FPSO) chartered for Libra 1. Borges noted that some of the domestic content requirements established in the production sharing agreement, especially for production units, are unfeasible given current market conditions and the level of industrial development in Brazil. He said that a reduction in domestic content to the level achieved for the last four FPSOs that are operating in the pre-salt is fundamental for the project to leave the drawing board.
“The production sharing agreement provides for exemption from local content requirements in the case of excessive prices and timeframes and a lack of technology or suppliers for a given item. We consider it absolutely crucial to be exempted from the need to fully comply with these demands, as they have become an economically unfeasible obligation,” Borges stated.
Innovation and efficiency improvements. During the same panel discussion, Libra’s general manager for services and special operations, Orlando Ribeiro, described a number of innovations and efficiency improvements involved in the project. For example, the evaluation phase has been shortened by 460 days, saving $360 million. This result was obtained by optimizing the collection of information during the exploration and evaluation phase.
Ribeiro also mentioned the use of a simplified design for intelligent well completion, a technique for remotely controlling wells and monitoring their performance, which has shortened this activity by 7 to 18 days. He also talked about the use of a water alternating gas (WAG) injection loop, an innovative concept that allows two water/gas injector wells to be connected in a loop. This simplification has cut the amount of flexible lines used, and consequently saved $300 million.
The involvement of suppliers right from the design phase was also mentioned by Ribeiro as an excellent source of gains. It is estimated that this will cut the cost of investment in equipment and the installation of subsea systems in the Libra 4 project by 30%, saving around $400 million.
Extended well test. Francisco Costa, the Petrobras manager responsible for Libra’s extended well test and early production system, highlighted the use of pioneering technological solutions applied in the project’s first production phase, which will start up at the end of this year.
Costa mentioned the following innovations: the first FPSO dedicated to extended well tests equipped with gas reinjection facilities; the first ever use of 8-in. flexible production lines in this block’s pressure conditions; the first pre-launch of production lines using support buoys; the largest turret (to receive flexible production and injection lines, oil and gas pipelines, and mooring lines) used in ultra-deep waters, with a capacity of 600 metric tons; and the use of a swivel device (to connect rotating and stationary elements on platforms and drilling rigs, allowing the upper part to remain still while the lower part rotates) with the highest gas injection pressure in the industry.
Costa noted that Libra’s pioneer FPSO, which will perform the extended well test, is on its way to Brazil. According to him, the two wells that will be connected to the ship are now ready, and the installation of flexible lines and subsea equipment in the block has been started. The test is aimed at reducing uncertainties, by enabling the consortium to understand the reservoir’s behavior and thereby optimize the final production systems. The FPSO will be capable of producing 50,000 bbl of oil and compressing 4 MMcfgd. The oil is good quality (27º API).
Long-term systems. Petrobras’ general manager for project design, Osmond Coelho Junior, emphasized the implementation of the extended well test and the main characteristics of the long-term production systems. Libra 1 is now only waiting for the public tender to charter the FPSO to be completed and for ANP to grant the waiver request. Libra 2 is in the process of selecting alternative options, while Libra 3 is in the initial design phase.
CNOOC’s representative in the Libra Consortium, Baosheng He, also took part in the panel discussion. He described governance aspects that have enabled the Libra @35 project’s benefits
