Mexilhao to cost $1.9 billion
Offshore staff
(Brazil)-Petrobras' development of the massive Mexilhao gas field in the Santos Basin is projected to cost $1.9 billion according to E&P Manager Francisco Nepomuceno. The field has proven reserves reported at 72 bcm of gas.
Petrobras will develop the field with Spanish-Argentine energy company Repsol-YPF, and negotiations continue between the two companies on the details of the development. The announcement by Nepomuceno on the cost of the project was somewhat unexpected at this point, because the two companies were planning to have a confidentiality agreement in place prior to making any statements.
Nepomuceno also stated that production from Mexilhao is planned to start in July of 2008 from a fixed platform. The gas will be transported from the field to a processing unit that will be built in Caraguatatuba in northern Sao Paulo state at a cost of $300 million.
When production starts in 2008, Petrobras plans to produce 12 MMcm/d initially and will ramp up to 15 MMcm/d by 2010.
Another large development in the Santos Basin is the BS-500 block, where the company plans to produce 18 MMcm/d. Nepomuceno was quoted as saying, "the BS-500 is a big project that should need two or three platforms."
The Santos Basin will see a great deal of exploration activity over the next five years. Petrobras plans to drill 74 exploratory blocks during this time frame and hopes to confirm the existence of 419 bcm of gas.
11/21/2005