Offshore Brazil: analysis of a successful strategy for reserve and production growth

Abstract

Major oil companies cannot continue to tolerate the high cost of exploration failure in a world of low future oil prices. There is a trend in the industry to a rationalization of worldwide exploration and production portfolios. Companies are looking to reduce their cost of finding by lessening the risk of failure at all levels of the exploration process, and stimulating resource replacement and growth through the efficient exploration of basins and plays. The coastal basins of Brazil offer an opportunity to assess the effectiveness of turbidite exploration along a passive continental margin, where non-marine, shelf, and deepwater exploration and production have taken place. The predominant role and strategy of Petrobras, the Brazilian national oil company, in the development of exploration offshore Brazil is worth looking at closely. When oil companies are planning new country-new basin ventures in passive margin deeper water environments worldwide, a lot can be learned from comparisons with similar but mature exploration environments with successful proven petroleum systems. Petrobras are showing the way forward in efficient, lower-risk, passive margin exploration and exploitation at more acceptable costs of E&P. An exploration strategy based on play focus, play environment, and deepwater technology development seems to be working in the Campos Basin, offshore Brazil. Driven by a desire for Brazilian energy self-sufficiency before the year 2000, Petrobras' mission is to achieve significant reserve and production growth through an exploration focus on the deep water Campos Basin. Exploration and production success in the Campos Basin is enabling Petrobras to manage their exploration portfolio better, and to minimise the cost of failure in other passive margin basins. A thematic statistical approach to the analysis of future play potential has given rise to a clearer assessment of offshore exploration risk, particularly exploration on the shelf versus in deeper water. This has helped Petrobras to develop a more focused exploration strategy, and has enabled them to allocate their E&P annual budgets more cost efficiently in their drive for oil self-sufficiency. New windows of opportunity are now opening for exploration success in Brazilian passive margin coastal basins hitherto considered past their best. The recent ability of Petrobras to explore outside the Campos Basin in new deeper water frontier passive margin basins, and achieve early discovery success, shows the value of experience and strategic focus. Worldwide, the exploration for new, often subtle, clastic turbidite plays is a potentially high cost enterprise. Passive margin exploration is moving swiftly into deeper waters of the South Atlantic off West Africa, as well as the North Atlantic West of the Shetlands. These areas offer a high-risk, high-reward challenge, and drilling environments in need of innovative new E&P technology and creative initial exploration strategies. Brazil, through its national oil company Petrobras, leads the way in this effort.