Rio de Janeiro: The Libra deepwater oil field that Brazil plans to auction off Oct 21 will yield minimum output of 1 million barrels of crude per day, the National Petroleum Agency, or ANP, said Friday.
That production would be equivalent to half of Brazil's current output of 2 million bpd.
The consortium that is awarded the right to develop the Libra prospect will likely need to drill for about four years after signing its production-sharing agreement, with commercial production likely to begin in the fifth year, ANP Director-General Magda Chambriard told a press conference in Rio de Janeiro.
ANP studies indicate that between 12 and 18 production platforms will be needed to develop Libra, whose recoverable oil is estimated at between 8 billion and 12 billion barrels, nearly equivalent to Brazil's current proven-reserve base of 14 billion barrels.
Libra, located some 183 km off the coast of Rio de Janeiro state in an area of the Atlantic Ocean where water depths range from between 1,700 meters and 2,400 meters, will be the first pre-salt field to be auctioned off by Brazil.
The pre-salt frontier, a series of ultra-deep oil fields that were discovered in recent years and stretch for some 800 km off the coasts of the southeastern states of Espirito Santo, Rio de Janeiro, Sao Paulo and Santa Catarina, could dramatically increase Brazil's proven-reserve tally and transform the country into a major crude exporter.
But accessing those fields, so-named because they are located under water, rocks and a shifting layer of salt at depths of up to 7,000 meters below the surface of the Atlantic, will be very costly and pose an enormous technical challenge.
The auction also will be the first Brazil will hold under a new production-sharing agreement, or PSA, system for pre-salt reserves.
In the PSA system, oil companies bear the mineral and financial risk of the project and use the money from oil sales to recover their costs. The money that remains after that is known as "profit oil" and is shared between the company and the government.
The winner of the auction will be the consortium that pledges to provide the state the highest proportion of profit oil.
The ANP estimates that the Brazilian government will receive roughly 75 percent of the profits from the Libra field, taking into account its share of the profit oil, as well as taxes and royalties.
Under the new contracts for the pre-salt fields, state-controlled oil giant Petrobras must be the sole operator of each PSA and have a minimum 30 percent stake in the all pre-salt projects.
The remaining 70 percent may be divided among a maximum of five other companies.