StatoilHydro to invest up to US$10 billion in next 10 years in Brazil

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RIO DE JANEIRO — The Norwegian oil company StatoilHydro is now planning to invest some US$5 -$10 billion in Brazil over the next 5-10 years with a focus on deepwater heavy oil fields. “Brazil is one of the most important areas in the world for StatoilHydro outside Norway,” company head of the South Atlantic region, Thore Kristiansen, told reporters in Rio de Janeiro at a press conference after presenting at the 15th Latin Oil Week.

StatoilHydro intends to invest some US$13.5bn in 2009 worldwide, with part of that going to Brazilian operations. “The company is very well funded. We recently raised US$3.5bn in the financial markets,” he added.

StatoilHydro aims to become by 2012 the second biggest oil producer in Brazil behind federal energy company Petrobras. For that to happen, the company is relying on its 100%-owned Campos basin Peregrino heavy oil field. Peregrino is scheduled to start operations in January 2011, peaking at 100,000b/d in the field’s first year.

Anglo-Dutch Shell is currently Brazil’s second largest oil producer with an output of 35,000-40,000b/d. The company will launch its Parque das Conchas offshore project in the Campos basin this year. Parque das Conchas has potential to produce 100,000b/d and Shell’s stake in the field is 50%. “I don’t know what Shell’s output in Brazil will be in 2012, but the data we have today indicates we’ll be number two,” Kristiansen said.

StatoilHydro is developing the Peregrino field with a very modest 20% recovery rate, according to the executive. “We expect the number to rise to 30%. We are putting our efforts on seismic imaging and interpretation to optimize drilling locations and improve the discovery rate.” The company, however, has yet to decide where it will market the oil from Peregrino. “It could be Brazil, the Gulf of Mexico or even Europe. It’s too soon to talk about that,” he added.

Peregrino, which has potential recoverable volumes of 500Mb, is expected to produce for more than 30 years, according to Kristiansen.

Meanwhile, StatoilHydro continues its exploration program in the Jequitinhonha basin along with partner operator Petrobras in block BM-J-3. “I know that Petrobras plans to drill a new well in Jequitinhonha this year. I can’t provide more information because they are the block’s operator,” StatoilHydro president in Brazil, Jorge Camargo, said in the same press conference.

The company confirmed Jequitinhonha’s pre-salt potential, but indicated the layer could be in ultra deep horizons, as the partners drilled a well below 5,000m from the water line without reaching the pre-salt. StatoilHydro has interests in eight exploration blocks in Brazil.

The Norwegian group also remains interested in participating in future oil and gas licensing rounds in Brazil as long as the government offers offshore areas. “We hope to acquire new licenses in future rounds, but we are waiting for the government’s committee to present the new regulatory framework for the oil sector,” Kristiansen said. “We expect round 11 to have offshore blocks. We are also looking at farm-in operations and M&A,” Kristiansen said without providing further details.

StatoilHydro also decided to replace its president in Brazil and Camargo will on August 1 pass the command to Kjetil Hove, who was Peregrino’s project director during its authorization phase. “I’m looking forward to this new cycle in my professional life,” Camargo said. He will continue with StatoilHydro as a part-time senior advisor to the new country president.

BN Americas

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