But work in new fields has been slower to start up than expected, leaving Halliburton on the hook for high infrastructure and personnel costs that it says are weighing on its otherwise robust earnings. On Tuesday the company reported that its fourth quarter profits rose 19% to $793 million on $7.6 billion in revenue, boosted by growing revenue from the company’s international operations.
After Eike Batista – once the richest man in Brazil – filed for bankruptcy, investors braced themselves for a tropical storm on the Bovespa stock market. Yet, so far, Latin America’s largest ever corporate default has gone down as smoothly as a caipirinha in Copacabana. Markets had begun to price in the $6bn insolvency ever since OGX, Mr Batista’s oil company, revealed in July that its only two producing wells had flopped.
It would nonetheless be wrong to conclude that Brazil has nothing to learn from Mr Batista’s spectacular collapse. The sinking of OGX has brought into focus the multitude of problems plaguing Brazil’s oil industry. In 2007, the discovery of an offshore reservoir containing as much oil as the North Sea was hailed as a “gift from God” by the then president Luiz Inacio Lula da Silva. Today, OGX is not the only oil company struggling with high debt and sliding revenues.
Oil majors interested in snapping up Brazil’s largest offshore oil discovery had better be prepared to write some very large checks.
The total cost of developing the giant Libra field over the next 35 years could be at least $174 billion, making it the most expensive single oil field project ever developed—more than the Kashagan field in the Caspian Sea, which is expected to cost at least $150 billion, according to IHS Energy Insight.
Sure – the cost is only two-and-a-bit months’ worth of bond purchases by the U.S. Federal Reserve.
A strange-looking vessel inspired by the exotic sucker fish is due to leave Norway for Brazil’s giant offshore oilfields this week on a mission to revolutionise deep sea oil loading methods.
At 47 metres tall, 28 metres long and with an 11 metre keel, HiLoad DP unit No. 1 looks top-heavy and out of place in the water, more like a partly submerged container-port crane than a ship of any type – or a fish for that matter.
But attached to its mother ship, the oil tanker Navion Anglia, the vessel is preparing to head anyway from the Norwegian port of Kirstiansund in southern Norway to the ocean off Rio de Janeiro on a debut 10-year commercial trial contract for Brazilian state oil company Petrobras.
Kenneth Foo & Kyunghee Park – Bloomberg, 07/22/2013
Keppel Corp. (KEP), the world’s largest oil-rig maker, will focus on building more offshore production and support vessels in Brazil as competition from China cuts prices for its main product.
Brazil’s offshore development boom means Keppel’s yard is now mainly utilized for building rigs for state-owned Petroleo Brasileiro SA. The Singapore-based company is setting up a second yard to meet demand for other vessels and to offer repair and conversion work, Chief Executive Officer Choo Chiau Beng said in an interview on July 19.
“We’re not interested to take a lot more work than the six semis from Petrobras because we do not want to overload our shipyard,” Choo said, referring to an order to build semi-submersible rigs for state-owned Petroleo Brasileiro SA. “We want to leave some capacity for our other customers” who need floating production, storage and offloading platforms, or FPSOs, and for oil-rig repairs, he said.
Brazilian state-run energy giant Petroleo Brasileiro (PBR, PETR4.BR), or Petrobras, said late Monday that a new subsalt oil discovery opens a new exploration frontier in the Santos Basin, where billions of barrels of crude have already been discovered.
The first well drilled in the offshore BM-S050 block, dubbed Sagitario, was found to contain high-quality oil, Petrobras said. Petrobras operates the block with a 60% stake. The local unit of BG Group PLC (BG.LN) holds 20%, while Repsol Sinopec Brasil retains the remaining 20%.
The discovery is significant because it was made to the west of the cluster of oil discoveries made deep under a thick layer of salt off Brazil’s Atlantic Ocean coast in the mid-2000s. The Lula field, which holds estimated recoverable reserves of between 5 billion and 8 billion barrels of oil equivalent, or BOE, and is currently producing about 100,000 barrels a day, and the Sapinhoa field that started pilot production earlier this month both sit due east of the Sagitario discovery. Sapinhoa is estimated to hold recoverable reserves of 2.1 billion BOE.
From his rickety fishing boat, Alexandre Anderson has watched his daily catch shrink. Over the years he’s also seen sludge from oil leaks and spills — to him an omen of what is to come as Brazil develops some of the world’s biggest and most technically challenging offshore oil fields.
But Anderson, 40, head of a fishermen’s cooperative, is a lone voice against one of Brazil’s most powerful sectors, a rapidly expanding oil industry that in recent years notched important deep-sea discoveries that have united Brazilians in a patriotic fervor. Those “elephant fields” 200 miles offshore have given Brazil one of the world’s largest proven reserves of oil and instantly made a country known more for soybeans and sugar cane a potential rival to heavyweight oil exporters such as Nigeria and Qatar.
Yet signs have emerged that the oil production, in swirling, frigid waters going down five miles, could pose serious hazards in a country that holds itself up as an international leader on environmental matters. In November, an undersea leak at the Frade field operated by Chevron spewed 3,000 barrels about 230 miles off northeastern Rio state, shaking the sense of security that Brazil’s regulators had about producing oil off this picturesque coast.