Galp sees Brazil's Santos as one of world's "geological jewels"

Mar 05, 2009 01:00 AM

Portugal's Galp Energia is shifting its focus to E&P from refining and marketing thanks to its stakes in some of Brazil's leading Santos discoveries, company CEO Manuel Ferreira de Oliveira told.
"The Santos basin is one of the largest geological jewels that nature has offered to the oil and gas industry in recent times," he said, adding the basin would be profitable at current prices.

Galp has earmarked EUR 1.9 bn ($ 2.4 bn) in E&P capex for 2009-13, with the lion's share going to Brazilian projects. As part of its investment strategy, Galp will pump EUR 350 mm into Santos's first production unit, Tupi-1.
The EUR 350 mm are "totally consistent with the ongoing program there," Oliveira said about Tupi-1, adding that production will start next quarter with output expected to reach 14,000 boepd, "limited by gas handling constraints."

Led by Brazil's federal energy company Petrobras, the Tupi consortium has awarded the project's major contracts and expects processing capacity to reach 100,000 boepd and gas treatment capabilities to total 4 mm cmpd.
"Tupi pilot production will be the major contributor to production growth, from 2011 onwards," according to the corporate presentation. In fact Brazilian production will lead Galp's growth in coming years, which is forecasted to increase to 40,000 boepd in 2013 from last year's 15,000 boepd before hitting 150,000 boepd-plus in 2020. Santos's Iara and Jupiter will also contribute to the growth, which does not include estimates from long-term add-on from Venezuela.

Drilling, testing
Onshore Brazilian production will ramp up in 2013 while extended well tests at Santos offshore prospects Iara, Bem-te-vi, Caramba and Jupiter will start in 2010-13, according to Galp.
Specifically, Petrobras will drill one appraisal well this year on Santos block BM-S-8, in which Galp has a 14 % stake, according to the presentation. Petrobras will also drill two appraisal wells and one development well on BM-S-11, which is home to Tupi and Iara. Galp has 10 % in the block. Petrobras will drill one exploration well this year in BM-ES-31, in which Galp holds 20 %.

As joint operators, Petrobras and Galp will drill eight appraisal wells in the onshore Potiguar basin and one exploration well in Espirito Santo onshore areas. And as sole operator, Galp will drill two exploration wells and one appraisal well in Sergipe-Alagoas this year.
Overall Galp has exploration upside potential of 2 bn bbl over some 67,000 sq km of exploration area, which in large part covers Brazil, the CEO said.

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