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10 major South American upstream Oil & Gas projects you need to know about

21/08/2019
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Since the dawn of the hydrocarbon age, South America has been a prolific source of oil and gas supplies to an industrialising world. Whilst North America is today regaining its place as one of the world’s top producers thanks to its burgeoning shale industry, South America has an array of equally exciting unconventional resource plays (shale, deepwater etc) which are set to start producing during the course of the next decade, strengthening the region’s position as a major global hydrocarbon hub.
10 major South American upstream Oil & Gas projects you need to know about
(Image via Petrobras).

As oil majors and national operators alike seek to shore-up their proven reserves, they are increasingly viewing the deepwater basins off the coasts of South America as areas of exceptional potential. And the numbers bear this out. Research firm GlobalData expects E&P companies will invest an average capex of $12.7bn per year on oil and gas fields across South America between 2018 and 2025. Whilst Brazil will benefit from the lion’s share of this investment, other South American nations are also likely to see considerable E&P activity including Argentina with its enormous shale formations, whilst Venezuela is still home to massive reserves of heavy crude oil.

So with increased activity and investment on the way, these are the 10 major South American upstream oil and gas projects you need to know about…
Loma Campana Field Development (Vaca Muerta Shale)

Loma Campana Field Development (Vaca Muerta Shale)


Cost: $17bn (approx.)
Location: Argentina


Argentina’s vast shale formations which are among the biggest in the world have long offered a tantalising prospect for oil majors, but it’s only in recent years when Argentina’s government has relaxed legislation and signalled its openness to foreign investment that the majors have taken the plunge.

The first of these to commit in any sizeable way was Chevron with the Loma Campana Field Development which is recognised as the flagship development of Argentina’s Vaca Muerta shale.

Chevron is developing the field in collaboration with YPF - Argentina’s national integrated oil company - and since first signing an agreement in July 2013 the two companies have undertaken development in two phases. The first phase has featured a 132-well pilot drilling programme limited to a 20km2 section of the concession (This pilot phase started in 2010 and was concluded in 2012). Full field development began in 2013 and is expected to include the drilling of as many as 2,000 wells.

Although it is understood that the Loma Campana Field Development project is still in the drilling and appraisal stage it is expected that YPF will soon step-up drilling efforts to achieve full production and reach a plateau of 100,000 boe/d in 2024.
Liza Oil Field (Phase 2)

Liza Oil Field (Phase 2)


Cost: $6bn (approx.)
Location: Guyana
Start-up: 2022


Touted as one of the world’s next ‘oil titans’ Guyana’s recently discovered oil and gas reserves have attracted the attention of the oil majors, particularly ExxonMobil which has eagerly claimed concessions and undertaken extensive exploratory drilling activity in the deep waters off the coast of this small South American nation.

One of the highlights of this activity is Phase 2 of the Liza Oil Field development which will see the use of a second FPSO (known as Liza Unity) which will be positioned 8.5km to the east of the first Liza FPSO (known as Liza Destiny). This ‘Phase 2’ FPSO will have an oil processing capacity of 220,000 b/d and an oil storage capacity of 2 million barrels. Liza Unity FPSO will be connected to 30 wells, including 15 production wells, nine water injection wells and six gas injection wells. It’s anticipated that this FPSO alone will develop 600 million barrels of oil.

ExxonMobil confirmed in early-May 2019 that it will be funding the Phase 2 development of the Liza field and will be proceeding with project partners Hess Corporation and CNOOC International. At the time of writing the Liza Unity FPSO is undergoing fabrication. Development wells for Liza Phase 2 should begin early next year with start up being achieved in mid-2022, producing up to 220,000 barrels of oil per day.
Carcara Oil Field

Carcara Oil Field


Cost: $3.5bn (approx.)
Location: Brazil
Start-up: 2024


No discussion of upstream oil and gas production opportunities in South America is complete without mention of Brazil’s pre-salt formations beneath the South Atlantic. Since deepwater production techniques have improved and become more commercially viable, attention has turned to exploiting the excellent quality, high commercial value tight oil of these formations.

Prime amongst these projects seeking to exploit these reserves is the Carcara Oil Field project being developed by Equinor in collaboration with its partners ExxonMobil and Galp Energia.

Located within the pre-salt area of the Santos basin offshore Brazil, the Carcara Oil Field lies in water depths of 2,100-2,200 metres, approximately 250km off the coast. It’s estimated that the Carcara field contains 2 billion barrels of oil equivalent in recoverable reserves (making it one of the largest finds in the Santos basin).

Equinor has stated that it intends to develop the field using two FPSOs. The first will have an oil processing capacity of 220,000 b/d and a gas processing capacity of 15 MMcm/d. This first FPSO will connect to 12 production wells, four water injectors and four gas injectors.

At the time of writing it is understood that field development has entered the FEED stage and that Equinor is looking for a high-specification rig to carry out a development drilling campaign at the field.
Mero Oil & Gas Field (Phase 2)

Mero Oil & Gas Field (Phase 2)


Cost: $3bn (approx.)
Location: Brazil
Start-up: 2023


One of Brazil’s flagship oil and gas assets, the Mero field is located approximately 180km off the coast of Rio de Janeiro, in a water depth of 2,100 metres. The field is located in the pre-salt area of the Santos basin, near both the Lula and Buzios fields. With around 3.3 billion barrels of recoverable oil reserves the Mero Field is a prize which has been sought by many an oil company, resulting in an operating consortium that includes Petrobras (Brazil’s national oil company which is the lead-operator of the Mero Field), Shell, Total, CNPC and CNOOC.

The Mero Field is likely to be developed in at least four phases and will utilise several large-scale facilities due to the deepwater aspect of the field. Mero’s second phase will make use of an FPSO that has oil and gas processing capacities of 180,000 barrels per day and 12 million cubic metres per day respectively. The FPSO will be linked to six production wells and six water-alternating-gas (WAG) injection wells.

In June 2019 Petrobras and its partners took an investment decision to proceed with Phase 2 of the Mero Field with the FPSO set to be built by SBM Offshore using their Fast4Ward (F4W) concept, which involves the use of generic newbuild hulls and catalogue solutions for topsides and mooring systems which should accelerate project schedules and reduce overall costs.
Payara Oil Field

Payara Oil Field


Cost: $3.5bn (approx.)
Location: Guyana
Start-up: 2023


Another of Guyana’s massive oil and gas plays, the Payara Oil Field is located on the Stabroek block in water depths of over 2,000 metres. The Stabroek block is perhaps one of the most exciting prospects for E&P operators given that it covers a massive 6.6 million acres (equivalent to 1,150 Gulf of Mexico blocks), and indicates multi-billion barrel unrisked exploration potential.

The Payara Oil Field itself is estimated to hold 500 million barrels of recoverable reserves and has the potential to produce in the region of 450,000 b/d. The development of the field is being led by ExxonMobil in collaboration with Hess Corporation and CNOOC International and it is understood that Payara’s development will feature an FPSO with an oil processing capacity of 220,000 b/d linked to approximately 35-45 production and injection wells.

It is anticipated that the Payara project will be sanctioned later this year, with start-up projected to take place at some point in 2023.
Block BM-C-33 Pre-Salt Seat, Gavea & Pao de Acucar Discoveries

Block BM-C-33 Pre-Salt Seat, Gavea & Pao de Acucar Discoveries


Cost: $3bn (approx.)
Location: Brazil
Start-up: 2026


BM-C-33 is an exploration block located approximately 190km off the coast of Rio de Janiero within the pre-salt Campos basin. Operated by Equinor in conjunction with partners Repsol Sinopec Brazil and Petrobras, the block has already yielded significant discoveries in the form of Seat, Gavea and Pao de Acucar.

The Seat well was drilled in 2010, followed shortly after by the drilling of the Gavea exploration well. Both wells led to the discovery of large volumes of good quality oil, indicating that the rest of the pre-salt area of the Campos basin may hold significant oil and gas reserves.

This assumption was confirmed with the drilling of the Pao de Acucar prospect in February 2012 which led to the discovery of more than 250 million barrels of oil equivalent. Equinor identified two pre-salt accumulations which comprised a hydrocarbon column of 480 metres and overall net pay of 350 metres. According to Repsol Sinopec, which released a statement shortly after the drilling of the Pao de Acucar prospect, the block as a whole contains at least 700 million barrels of light oil and 3 trillion cubic feet of natural gas.

So what’s next for these exciting deepwater discoveries?

Conceptual design and engineering is currently underway and Equinor has revealed that an FPSO capable of processing 16 and 20 million cubic metres of gas, linked to 8-12 risers could be used to exploit the reserves.

Should the planned project developments proceed smoothly, first gas could be achieved from Pao de Acucar in 2026.
Loran-Manatee Gas Field

Loran-Manatee Gas Field


Cost: $2.1bn (approx.)
Location: Venezuela
Start-up: 2023


Straddling the offshore border between Venezuela and Trinidad & Tobago, the Loran-Manatee Gas Field is currently being developed by Chevron in collaboration with Shell and PDVSA (Venezuela’s national oil company). The Loran section of the field is situated on Venezuelan territory and is held by Chevron (40%) and PDVSA (60%), whilst Manatee is situated on Trinidad & Tobago territory and is held by Shell. Initial estimates suggest that the field was a whole contains 10.25 trillion cubic feet of gas.

Unfortunately, due to ongoing political instability in Venezuela a final agreement to develop the bi-national field has yet to be reached, however Trinidad & Tobago has allowed Shell to proceed with the development of the Manatee section regardless. This appears to be primarily due to the ongoing difficulties in Venezuela which have seen more than 50 countries recognise the interim presidency of opposition leader Juan Guaido rather than the administration of Nicolas Maduro.

“The decision to develop our part of the gas field is fueled by the inability to reach an agreement with Venezuela to monetize the deposits. We need the gas, but the prospects of an operational agreement for the cross-border field are now further away given the current state of affairs in Venezuela,” a Trinidad & Tobago Energy Ministry official told a local press outlet.

Should an agreement regarding the Loran-Manatee Gas Field eventually be reached a central processing facility, several satellite wellhead platforms, and export lines to Venezuela and Trinidad & Tobago could be developed.
Sea Lion Oil Field (Phase 1)

Sea Lion Oil Field (Phase 1)


Cost: $1.5bn (approx.)
Location: Falkland Islands
Start-up: 2022


The promise of vast amounts of exploitable oil reserves has long hung over the Falkland Islands. Since the 1950s seismic data and exploratory wells have suggested that the Falkland Islands sit within a billion-barrel basin.

Now, UK-headquartered Premier Oil is seeking to exploit some of these reserves via its Sea Lion Oil Field development situated some 220km off the coast in a water depth of 450 metres. The Sea Lion Field will be the Falklands’ first oil and gas development and is set to be carried out in four phases. The first phase will utilise a leased Suezmax-sized FPSO that will tap around 160 MMbbl via 8 producer wells, 5 water injection wells and a gas production well.

Once operational, Premier Oil have stated that Phase 1a will peak at 75,000 b/d, before plateauing at around 60,000 b/d. Gas is expected to flow at more than 50 MMcf/d, with more than 100,000 b/d of water to be injected.

Although details regarding the subsequent phases are scant, it is believed that Phase 1b will involve additional wells to exploit a further 160 MMbbl, whilst Phases 2 and 3 will incorporate nearby discoveries Zebedee and Isobel Deep.

Should Premier Oil proceed with a final investment decision (FID) commissioning and start-up of the Sea Lions Oil Field will occur in 2022.
Grand Fuerte Exploration Area

Grand Fuerte Exploration Area (Kronos, Purple Angel and Gorgon Gas Discoveries)


Cost: $1bn (approx.)
Location: Colombia
Start-up: 2026


Since the mid-1980s Colombia has been an oil exporter with its onshore and offshore reserves being primarily managed and exploited by state-owned Ecopetrol (also known as Colombian Petroleum Enterprise). The Grand Fuerte Exploration Area is the latest part of Colombia to come under Ecopetrol’s microscope (in collaboration with Anadarko) with significant gas discoveries being made in the Kronos, Purple Angel and Gorgon blocks of the exploration area.

All three of these discoveries are situated in ultra-deep waters off the Caribbean coast of Colombia. Ecopetrol has announced that it is likely that first gas from the Gorgon discovery could be expected by 2026. Options for future development include a gas cluster where several fields will share the same production facilities.
Iniguazu Exploration Block

Iniguazu Exploration Block


Cost: $900m (approx.)
Location: Bolivia
Start-up: 2022


Bolivia’s southern region reportedly holds rich natural gas reserves, and it’s these reserves which Spanish energy company Repsol is seeking to exploit via the Iniguazu Exploration Block which is estimated to contain 3 Tcf of gas reserves.

Repsol first announced in late-2017 that it would be investing $900 million in the block which is situated in the south of Bolivia. If the exploration stage of the Iniguazu project is successful production would be approximately 6.5 million cubic meters of natural gas per day. Other partners involved in the project include Shell, Pan American Energy (PAE), YPFB Chaco and YPFB Andina.

Start-up of operations at Iniguazu is planned for 2022.
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Recent Comments
Interested in hearing about HSE and emergency management opportunities for the South American projects.
Armand Damesimo, 22 August 2019
Its really a good one trust to getting idea. It is informative.
Bidding Consultants, 22 August 2019
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10 major South American upstream Oil & Gas projects you need to know about - Time to read 13 min
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