Koil Energy Solutions Inc. (KLNG)

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Shell starts development of BC-10 block off Brazil
06-11-06 Shell Exploration & Production and partners have let the first contracts for development, involving subsea liquids-gas separation and pumping, of three deepwater heavy-oil fields on Block BC-10 off Brazil.
One of the contracts is for leasing of a floating production, storage, and offloading vessel with 100,000 bpd of oil processing capacity from SBM Offshore. Another is for the drilling of 10 wells by the Global Santa Fe Arctic 1 semi-submersible rig, now at work in the Gulf of Mexico.

The first phase of Block BC-10 development will involve Ostra, Abalone, and Argonauta fields. A fourth field, O-North near Argonauta, will be developed later. State-owned Petroleo Brasileiro (Petrobras), a partner, calls the area Parque das Conchas and estimates production will start in 2011.
Shell, the operator, will develop the fields with horizontal subsea wells and manifolds and tie each field back to the FPSO, which will be moored in 1,780 m of water. The longest tie-back will be 15 km for Abalone field.

A Shell statement called the project "the first full-field development based on subsea oil and gas separation and subsea pumping." Liquids will be separated from gas in large-diameter caissons. Electric submersible pumps on the seafloor will pump the liquids through steel lazy-wave risers to the FPSO, where oil and water will be separated.
Equipment on the FPSO will be able to inject 75,000 bpd of water in the fields. Gas will move through a 40-km pipeline to Jubarte.

Shell declared Block BC-10 commercial at the end of last year after drilling 15 exploratory wells and discovering reserves estimated at 400 mm bbl of 16-24 degrees gravity oil. The block is 120 km southeast of Vitoria in Espirito Santo state.
Interests are Shell 50 %, Petrobras 35 %, and Oil & Natural Gas Corp. 15 %.