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Queiroz Galvao E&P tendered Brazil Atlanta FPSO

QGPE called for two tenders in view of Atlanta FPSO

2B1st_Project_Smart_Explorer_Sales_Pursuit_ToolThe development of the Block BS-4 is now moving forward with the call for tenders issued by Quieroz Galvao Exploration and Production (QGEP) for two floating production storage and offloading (FPSO) vessels in view of the Atlanta heavy crude oil project in the Santos Basin offshore Brazil.

In the Block BS-4, QGEP is leading a joint venture where OGX, renamed Oleo e Gas Particiaçoes (OGX-OGP), and Barra Energia (Barra), are sharing the working interests.

QGEP_Genesis_Atlanta_FPSO_MapAll these Brazilian companies hold a rather balanced stake in the Block SB-4, where:

 – QGEP 30% is the operator

 – OGX-OGP 40%

 – Barra 30%

The Atlanta project is part of the new strategy of the Brazilian Government to end up Petrobras de-facto monopoly in expecting to speed up the offshore exploration and production post-salt and pre-salt.

In this context, OGX-OGP replaced Petrobras in Atlanta joint venture in December 2012 taking over its 40% shares while QGEP was taking the operatorship of the project.

Atlanta is lying by 1,550 meters of water depth in the south part of the Santos Basin, approximately 185 kilometers from Brazil coastline.

The development of the Block BS-4 is specific as it contains extra heavy crude oil which requires specific processes to be extracted.

In this Block BS-4, QGEP and its partners OGX-OGP and Barra are planning to develop Atlanta and its satellite field Oliva.

QGEP awarded Atlanta FPSO FEED work to Genesis

Together Atlanta and Oliva are estimated to hold between 1.5 million and 1.9 million barrels (b) in-place reserves of crude oil.

Because of the extra heavy nature of the crude oil, QGEP, OGX-OGP and Barra, are targeting a conservative recovery rate of 17%.

This uncertainty on the actual recovery rate is contributing to the double call for tender on the Atlanta FPSO.

QGEP_OGX-OGP_Atlanta_FPSO_ProjectUntil it comes in full-scale production, QGEP and its partners do not want to take any risk in over-sizing this FPSO.

In the same time they are keen to start production on fast track since the reserves are now well known.

In 2013, QGEP appointed Technip‘s subsidiary Genesis  Oil & Gas Consultants Ltd (Genesis) to provide project consultancy services and the front end engineering and design (FEED) work.

From the full costs estimates submitted by Genesis to QGEP, OGX-OGP and Barra, two FPSO capacities present optimal return on capital employed (ROCE):

 – 30,000 barrels per day (b/d)

 – 80,000 b/d

Beyond the 80,000 b/d capacity, the costs are reported to be spiraling up because of the complexity of the process to treat extra heavy crude oil and the capabilities of the local shipyards to build large FPSOs.

Depending on the prices and delivery times submitted by the bidders for the two FPSOs frame sizes, QGEP and its partners may decide either to phase up the project in beginning with the small unit and then install the large one later on, either to go straight for the large unit.

According to the on going bidding process, QGEP and its partners OGX-OGP and Barra, the Atlanta FPSO is small size or large size or both should be awarded on second half 2014 for first production to start in 2016. 

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