Oil price may hamper Brazil’s plans to open presalt fields
Brazil’s Congress has approved legislation that will remove Petrobras’ obligation as sole operator on the country’s presalt developments.
According to analystDouglas-Westwood (DW), these ultra-deepwater fields, discovered in 2007, represent a huge opportunity as the largest group of offshore reserves uncovered this century.
However, development progress has been slowed by Brazil’s financial difficulties resulting from the lower oil price and the impact of the country’s “Operation Car Wash” corruption scandal. Mounting financial pressure has led Petrobras to cut its capex plans and production targets.
By opening these deepwater assets to foreign investors the government hopes to step up the pace of development and production from the presalt fields, freeing Petrobras to focus on more developed plays with existing offshore infrastructure and lower capex requirements.
Due to the significant potential on offer, DW expects many international E&P companies to pitch in. However, as Petrobras largely controlsBrazil’s E&P activities, the few international companies engaged in deepwater action off Brazil, such as Shell and Anadarko, may still prefer to focus on other commitments.
Shell inherited various large producing interests off Brazil following itsacquisition of BG Group, while Anadarko is working on its Shenandoah project in the GoM, and on advancing gas field developments off Mozambique. And the current oil price environment could deter other operators because of the huge capex requirements for ultra-deepwater developments.
However, ifOPEC’s recent announcement of production cuts lifts the oil price significantly next year, this could increase the attractiveness of the presalt fields to international investors, DW suggests.