January 23, 2014 / 2:16 PM / in 4 years

Consortium abandons well in giant Brazil Carcará oil find

3 Min Read

* Carcara owned by QGEP, Petrobras, Galp-Sinopec and Barra
    * Prospect likely one of Brazil's biggest-ever finds
    * Abandoned well could lead to charge on earnings

    By Jeb Blount
    RIO DE JANEIRO, Jan 23 (Reuters) - Brazil's QGEP
Participações SA an oil and gas company, said on
Thursday it and its partners had abandoned a well in the giant
Carcará offshore discovery.
    The extension well was being drilled to help define the
limits of the Carcará prospect, QGEP said in a statement. Many
believe Carcará to be one of the largest-ever discoveries off
Brazil's coast. 
    The abandoned well is located in the BM-S-8 block in the
Santos Basin south of Rio de Janeiro. QGEP owns 10 percent of
BM-S-8. Brazil's state-owned oil company Petroleo Brasileiro SA,
or Petrobras owns 66 percent and operates the area
for the other owners.
    Portugal's GALP Energia SGPS SA and China's
Sinopec jointly own 14 percent and Barra Energia do
Brasil Petroleo e Gas Ltda owns 10 percent. 
    The well, which was being drilled by Petrobras, was
abandoned because of "operational problems," QGEP said. The
BM-S-8 partners were using Odebrecht Oil & Gas' NORBE VIII drill
ship for the job. Wells in the deep water area can cost between
$80 million and $250 million to drill. Abandoning a well usually
involves a charge against company earnings.
    A new well will be drilled in two phases starting in the
second quarter of 2014 and a test of the cemented well is
expected during 2015, QGEP said.
    While no official estimate of Carcará's resources has been
announced, industry sources say it could rival the 8 billion
barrel Lula Field to the east of Carcará. That's enough oil to
supply all needs in the United States, the world's biggest oil
consumer, for more than 14 months. 
    The BM-S-8 partners also expect to start drilling the
Guanxuma prospect 30 kilometers from Carcará in 2015.
    In the same statement, QGEP also outlined its operations in
other fields.
    The Manati offshore field south-west of Salvador, Brazil,
produced an average of 6 million cubic meters of gas a day
(211.9 mil cubic feet) in 2013, QGEP said.    
     Manati is 45 percent owned by QGEP, 35 percent by
Petrobras, which is also the operator, 10 percent by Brasoil and
10 percent by Rio das Contas.
    QGEP added it has submitted a development plan in December
for its 100 percent owned BM-J-2 block in the offshore
Jequitinhonha Basin off the coast of Brazil's Bahia state. It
found oil and gas in the block in August in a 4,800-meter-deep
well under a layer of salt.
    QGEP is controlled by the country's Querioz Galvão
construction and engineering group.

 (Reporting by Jeb Blount; editing by Sofina Mirza-Reid)

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