A first-of-its-kind vessel owned by Petrobras and Shell has begun pumping oil off Brazil in one of the world’s most lucrative deep-water basins.
Shell said Friday the companies fired up their first cloned offshore vessel assembled with standard parts and equipment in the pre-salt Santos Basin, a prolific region where some wells produce three times as much oil as the those in the Gulf of Mexico.
The floating production and storage offloading vessel, about 180 miles off the coast of Brazil in a field called the Lula South, can extract some 150,000 barrels of oil and 212 million cubic feet of natural gas daily at its peak.
It’s one of several major projects expected to make Brazil the second-largest source of oil-production growth after U.S. shale plays this year.
The vessel, floating above more than a mile of ocean, is also Shell’s 10th FPSO in the Santos Basin, where lifting costs are only $8 a barrel, making it one of the most competitive in the world. The average well in the Santos Basin can pump 28,000 barrels of oil a day, breaking even at $35 a barrel oil, rivaling some of the most prolific fields in West Texas, according to IHS Markit.
Shell said it plans to invest in more standardized deep-water vessels over the next three years in Brazil.