Published: Jul 1, 2009 Anadarko Petroleum Corp. is betting on the potential of seven frontier blocks offshore Brazil after becoming the first independent company to reach a pre-salt reservoir last year at the Wahoo prospect in the BM-C-30 block, Campos basin.
Between August and September the drill ship Deepwater Millenium will drill a new exploratory well in block BM-C-30. This drilling, the third in the area, will also be carried out in the pre-salt zone.
Kurt McCaslin, a former president of Anadarko Brazil and now director of Brazil Development for Anadarko Petroleum Corp., told OGFJ that during 2009 the company’s investments in Brazil will reach roughly $100 million.
The exploration program includes four pre-salt deepwater wells, one in each of the Campos basin blocks, BM-C-30 and BM-C-32. In the Espirito Santo basin, drilling is already underway at the Serpa prospect in the BM-ES-24 block and another well is planned in the BM-ES-25 block.
The company has invested more than $500 million in exploration and development activities in Brazil since 1998. Anadarko Brazil currently participates in E&P joint ventures covering approximately one million gross acres, added the executive.
“We have an active program planned for the BM-C-30 block where we made the pre-salt Wahoo discovery in 2008. We plan to conduct multiple drillstem tests and drill an exploration well on the block in the second half of this year about 8 km from the Wahoo discovery. We expect the results of that well to provide additional information on Wahoo. We plan to drill the well to about 6,000 meters depth. Keep in mind, we’ve drilled one well on this block, and while it’s still a bit early to discuss development options or first production, we are certainly encouraged by what we’ve seen so far, and the quality of our prospects in the pre-salt play,” affirmed the executive.
The block was acquired in the sixth bidding round of the National Petroleum and Biofuels Agency (ANP). The Anadarko subsidiary holds a 30% interest and is the operator, while Devon Energy Corp. holds 25%; EnCana Brasil Petroleo Ltd., a subsidiary of Bharat PetroResources Ltd. and Videocon Industries, holds 25%; and SK do Brazil Ltda. holds the remaining 20%.
The exact location of the new well is still under analysis. The drilling will be carried out after the conclusion of 60-day maintenance works on the drilling unit that are expected to be carried out in Angra dos Reis. The drillship has a contract with Anadarko until 2013.
Anadarko’s Wahoo discovery in Campos basin is in a pre-salt Cretaceous carbonate formation. The 1-APL-1-ESS discovery well on the BM-C-30 block lies in 4,650 feet of water, 25 miles southeast of and syncline separated from Petrobras previously announced pre-salt discoveries at giant Jubarte field off Espirito Santo state.
Preliminary Wahoo results, based on wireline logs, indicate at least 195 feet of net light oil pay with play characteristics similar to those of the nearby Jubarte 1-ESS-103A well. Jubarte is Brazil’s first producing pre-salt field, having recently achieved reported initial rates of 18,000 b/d of light oil.
“We were attracted to Brazil because of its substantial potential, high-quality prospects and stable fiscal regime. Maintaining this stability is of the utmost importance for companies like ours to have the confidence to continue making substantial, long-term investments in Brazil. Therefore, we are carefully monitoring the developments regarding the pre-salt regulatory system in Brazil,” said McCaslin.
The US independent company counts on its knowledge of the pre-salt in other countries. “We have been exploring the pre-salt reserves of the Gulf of Mexico (GoM) for more than 15 years,” McCaslin told OGFJ.
“We were attracted to Brazil because of its substantial potential, high-quality prospects, and stable fiscal regime. Maintaining this stability is of the utmost importance for companies like ours to have the confidence to continue making substantial, long-term investments in Brazil.” – Kurt McCaslin, Anadarko Petroleum
Kurt McCaslin, a former president of Anadarko Brazil and now director of Brazil Development for Anadarko Petroleum Corp. Photo courtesy of Anadarko.
“We are excited about the opportunities in Brazil’s pre-salt play and we believe our expertise in sub-salt exploration and development places us in a good position to create substantial value for all of our stakeholders. We have been producing from formations below salt since the early ‘90s and have developed a significant amount of expertise with seismic imaging, drilling and producing subsalt reservoirs. In fact, today nearly 15% of Anadarko’s worldwide production comes from reservoirs located below the salt,” he added.
In the Gulf of Mexico, the company operates at 7,000 to 10,000 meters, which are greater than depths reached in Brazil pre-salt areas up to now.
On June 24 Anadarko announced its third deepwater discovery in the GoM this year, a Miocene reservoir at the Samurai prospect in Green Canyon block 432. This discovery well encountered more than 120 feet of net oil pay in several high-quality sands some 12 miles north of the Marco Polo platform.
Anadarko closes Peregrino sale
In December 2008 Anadarko completed the sale of its 50% interest in the Peregrino heavy-oil field offshore Brazil to Norway’s StatoilHydro and received approximately $1.4 billion of net after-tax proceeds.
“The sale of Peregrino provides us with an opportunity to strategically redeploy capital toward our lower-risk assets in the US onshore and high-impact oil projects such as Caesar/Tonga in the deepwater Gulf of Mexico and the Jubilee development offshore Ghana, both of which are anticipated to add significant volumes by 2011,” Anadarko chairman and CEO Jim Hackett said.
“With the $1.4 billion of cash received from the sale and the anticipated book gain of approximately $900 million, we’ve enhanced the strength of our balance sheet, and we are confident that we will achieve our targeted net debt-to-cap range of 25% to 35% by the end of this year.”
At year-end 2008 Anadarko in the US and internationally had proved reserves of 8.1 tcf of natural gas and 0.9 billion barrels of crude oil, condensate and NGLs. Combined, these proved reserves are equivalent to 2.28 billion barrels of oil or 13.7 tcf of natural gas.
Excluding the effect of divestitures, the company’s proved reserves grew during 2008 by approximately 188 million barrels of oil equivalent (MMboe). During 2008, sales of proved reserves in place totaled 137 MMboe.
Last February the company announced it was lowering its capital budget to between $4 billion and $4.5 billion, allocating 20% for exploration and appraisal activities and 20% for mega-projects.
Even with reduced year-over-year capital expenditures, Anadarko expects to increase its total sales volumes in 2009.
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