After a series of delays, Brazil’s Petrobras should finally begin production by mid-year at two deep-water fields in the Gulf of Mexico, Jose Orlando Azevedo, president of Petrobras America said today.
The Brazilian oil giant, which received final clearance for the project in March from U.S. regulators, is awaiting a final investigation report on an accident at the site the same month, he said.
The report will determine the root cause of an incident in which an 8,000-foot pipe running from a giant production ship to the sea floor became detached. The pipe, known as a riser, was connected to a well in the Chinook field located about 165 miles offshore Louisiana in an area of the Gulf known as Walker Ridge.
Petrobras plans to develop Chinook and the nearby Cascade field from a huge Floating Production Storage and Offloading vessel, or FPSO, marking the first time such a system has been used in the U.S. Gulf. But the project has been repeatedly postponed.
“The report is supposed to be issued at the end of May,” said Azevedo after a press conference at the 2011 Offshore Technology Conference. “We need to understand what really happened so that we can gather the final solutions so we can avoid this in the future.”
Then, the company should be ready to start production at the fields, by “the middle of the year” or “end of summer,” he said.
Petrobras is one of the largest leaseholders in the Gulf of Mexico, with 187 exploration blocks. The Cascade-Chinook project is its first major project in the U.S. offshore region.
At the press conference, Petrobras CEO Jose Sergio Gabrielli said his company is not ready to expand further in the Gulf before doing more work in the acreage it already controls.
The company is also busy developing massive “pre-salt” oil discoveries offshore Brazil in recent years. The country’s oil production now surpasses its domestic demand by 500,000 barrels per day, Gabrielli said, and is poised to grow significantly higher.
Asked how big of an oil trading partner he sees the U.S. becoming over time, Gabrielli said, that is not up to Brazil or even the United States.
Under the American system, oil companies determine how much crude they buy or sell. “The U.S. does not value strategic alliances,” Gabrielli said. “That’s a big problem for the U.S., not for us.”