Petroleos Brasileiro SA (Petrobras) has developed Brazil's second largest natural gas province in the world's largest rain forest.
The Brazilian state oil company has proved gas reserves in the Rio Urucu area of the Amazon jungle totaling 1.84 tcf. That compares with 3.08 tcf contained in the offshore Campos basin, source of most of Brazil's oil and gas production.
The environmentally sensitive Urucu region is one of the most dense, remote jungles in the world. Because of environmental concerns about pipelines in the rain forest and a government emphasis on boosting the natural gas share of Brazil's energy mix, a small liquefied natural gas project is shaping up as the best option for developing and marketing Urucu gas.
The Amazon campaign underscores a government initiative to boost Brazilian consumption of natural gas. In Brazil natural gas accounts for only 4% of primary energy consumption. Some years ago, the government set an official goal of boosting the gas share of the primary energy mix to 10% by 2000. Along with pressing domestic gas development, Brazil is pushing efforts to boost imports of gas from Bolivia (OGJ, Aug. 22, 1994, p. 24) and Argentina.
AMAZON E&P
Petroleum exploration in the Amazon region got under way in 1917.
The first significant hydrocarbon discovery was the Rio Urucu oil and gas find in the Solimoes basin of the upper Amazon River basin (OGJ, Feb. 12, 1990, p. 17).
Since then, Petrobras has invested $2 billion the region on E&P and expansion of the region's petroleum infrastructure.
Since 1986, an average of two seismic crews per year has been surveying the Solimoes basin near the confluence of the Jurua, Tefe, and Coari rivers. Some exploration also has been carried out in other sedimentary basins of Brazil's Amazon region, involving integration and reinterpretation of old seismic data, shooting new seismic, and drilling wildcats.
The Amazon region has a sedimentary area prospective for hydrocarbons that covers more than 1.8 million sq km (Fig. 1)(24113 bytes). In addition to the producing Solimoes basin, other Amazon region basins of interest are Acre, Amazonas, Parnaiba, Tucutu, Marajo, Sao Luis, Braganca-Viseu, and Barrierinhas. Of special interest for oil potential is the deepwater portion of the mouth of the Amazon River.
The region features terrain ranging from almost impenetrable jungle to desert sand dunes and human presence ranging from Indian reserves to cities.
Since 1986, 92 wells have been drilled in the Urucu region. Of those, 31 are currently producing, with nine gas/condensate and the rest oil. Current production is 17,000 b/d of oil and condensate with an average gravity of 17, according to Rivaldo Alves Bernardo, Petrobras Urucu processing engineer. Urucu remaining oil reserves are put at 50.9 million bbl.
All of Urucu's gas production totaling 29.75 MMcfd is reinjected.
CURRENT DRILLING
Although quite a number of directional wells have been drilled in the Rio Urucu area, Petrobras recently drilled the region's first - and Brazil's seventh - horizontal well, Alves noted.
"Petrobras drilled the 7-RUC-34H-AM horizontal well at a cost of $8.3 million," lie said. "That is almost U times more expensive than a vertical well, but it diminishes the environmental impact and produces about three times more."
The horizontal well was drilled to a true vertical depth of 2,500 m and has a horizontal displacement of 370 rn. It is producing 1,500 b/d of oil.
Three drilling rigs are working in Brazil's Amazon region: two conventional and one helirig. Petrobras relies on the helirig to handle the exploratory wells and the conventional rigs - costing 30% less - to handle the development wells. The conventional rigs, barged in from Manaus or Belem, also can drill multiple wells as directional holes from a single drillsite cleared in the jungle. The wells drilled with the helirig costs $6-7 million, about the same as an offshore well. At least half this cost is for operational support, particularly the many trips required to transport the 3 ton modular rigs by helicopter.
PRODUCTION, PROCESSING
Petrobras projects that oil output from Urucu will average 15,000 b/d this year.
It reckons that gas production will climb to 87.5 MMcfd in 1997 and beyond.
Petrobras plans to install new oil gathering and transportation facilities that will bring capacity to 20,000 b/d. That will enable the tie-in of wells drilled in Leste do Urucu field 30 km away. Eight wells in the Urucu area currently are shut in.
It was the installation of gas compression in mid-1991 that allowed Petrobras to begin reinjecting as much as 21 MMcfd of gas that was being flared. With production at almost 30 MMcfd, that means some gas still is being flared.
In early 1993, Petrobras installed a gas processing plant at Rio Urucu (107152 bytes). the region's first (OGJ, Mar. 1, 1993, p. 25).
The plant is designed to process 23.5 MMcfd of solution gas using a mechanical refrigeration process to cool the gas to -29 C. and recover 1,250 b/d of propane/butane mix as well as 75 b/d of stabilized condensate. Liquids are shipped to the Porto terminal 55 km away on the Tefe River for barge loading and further transport upriver to Manaus, site of a 10,000 b/d refinery.
LOGISTICS
Horrendous logistics of the upper Amazon pose the biggest problem for marketing Urucu gas.
Petrobras' main obstacle in the Amazon is the river system itself, the principal means of transportation in the region. The levels of Amazon tributaries vary wildly from June to November, when rainfall is less frequent. Some, such as the winding Jurua, can drop as much as 18 m. Others, such as the Solimoes, offer precarious navigation conditions from August to November.
From Manaus to the Porto de Urucu river terminal-built to channel supplies to operating areas-strings of barges and river boats take 8-9 days to cover about 900 km twice a month carrying an average 1,300 tons of material and equipment to Petrobras installations.
The flight from Manaus to Urucu alone is 1 hr, 40 min.
GAS MARKETS
Petrobras' directors have approved a project to use Urucu gas currently being reinjected in a venture with Eletronorte, a subsidiary of state electric utility holding company Eletrobras.
The project calls for cutting power generation costs at Eletronorte's thermoelectric power plant serving Manaus by 50% by switching to natural gas from liquid fuels.
Getting the project off the ground calls for initial outlays of $32 million in 1995 and $75 million in 1996.
Plans call for laying a 52 in., 62 km gas pipeline from Urucu to a liquefaction plant at the River Tefe terminal near Coari. There the gas will be liquefied and stored in tanks for transport via Petrobras barges along the Solimoes and Negro rivers to the Reman refinery at Manaus. From the refinery, the gas will move to a regasification plant and be fed to Eletronorte power plants at Porto Velho, 600 km away from Manaus.
This approach avoids the use of a costly and environmentally contentious jungle pipeline.
If the project proceeds, by 1997 Urucu production could rise to 87.5 MMcfd to support the LNG/power venture. Petrobras studies show that Urucu gas reserves are sufficient to fuel power plants in the Amazon and supply the Manaus area gas demand for 43 years.
The holdup is financing. The World Bank, InterAmerican Development Bank, and several Japanese financial institutions have expressed an interest in participating in the project.
These international lending institutations apparently are waiting to see the outcome of efforts by Brazil's President Fernando Henrique Cardoso to privatize Brazil's power generation sector and to reduce or eliminate Petrobras' petroleum monopoly.
Cardoso recently won a watershed victory with those efforts after Brazil's congress recently passed legislation effectively ending Brazil's petroleum monopoly (OGJ, June 19, P. 30).
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