Shell, Petrobras, and Galp begin deep-water production at Lula North

Lula North

Royal Dutch Shell, through subsidiary Shell Brasil Petroleo Ltda., and partners Petrobras and Galp announced the start of production of the deep water project Lula North in the Santos basin.

Production at Lula North is processed by the FPSO P-67 and operated by Petrobras.

An FPSO is a Floating Production Storage and Offloading tanker.

The P-67 is the seventh FPSO deployed at the Lula field.

Additionally, it is the third of a series of standardized ships built for this consortium. It is designed to process up to 150,000 oil barrels and 6 million cubic meters of natural gas per day.

Shell, Petrobras, and Galp started production at Lula South with the FPSO P-69 in October 2018.

Lula field increases Brazil’s oil potential

This area was originally called Tupi Oil field, but Petrobras later renamed Lula oil field, given that it was discovered during the presidential term of Luis Inacio Lula da Silva. It is a large offshore site located in the Santos basin, 250 km off the coast of Rio de Janeiro.

The new name was made possible thanks to a little creativity on Petrobras’ part.

The company has traditionally named its oil fields after aquatic creatures once they are commercially viable, and it just so happens that Lula also means “squid” in Portuguese.

This field, discovered in October 2006, is the largest oil field found in the western hemisphere in the last 30 years. It has signified the resurgence of Brazil as a global oil major.

The country’s huge deepwater reserves have become the new frontier for energy exploration and could turn it into an important energy exporter.

Experts believe that Brazil has over 50,000 oil barrels buried in its fields at a depth of up to seven kilometers under the seabed; beneath a thick layer of salt in a region known as the Subsalt.

Joint participation in Lula North

Shell owns a 25 percent stake in the Lula consortium, operated by Petrobras (65 percent). For its part, Galp owns the remaining 10 percent stake. Discovered back in 2006, Lula is the largest production field in Brazil, accounting for 30 percent of the country’s oil and gas extraction.

Shell’s stake in the Lula field is subject to a unitization agreement.

The entire concession includes nine FPSOs. The other two operate in the Iracema field.

Shell in deep waters

In March 2018, Shell Brasil Petroleo, a subsidiary of Royal Dutch Shell, was awarded four additional blocks for deep-water exploration at the Campos and Potiguar basins. With this, it increased its overall operative presence abroad to 18 blocks. This happened at the fifteenth deep-water tender round organized by the Brazilian National Agency for Petroleum.

Shell won one exploration block as the sole operator and three in consortium with Chevron Brazil, Petrobras, and Petrogal Brazil. The Anglo-Dutch company will operate two of these blocks.

The company is planning to invest $5-6 billion each year until 2020 in its deep-water business in order to strategically increase the company’s production and performance.

It is on its way to posting an annual cash flow of $6-7 trillion by 2020 (at $60/Brent barrel RT 2016).

With its operations at Lula North, Shell and its partners are undertaking a new stage to boost oil production in the Amazon giant.

For more information, check Energía16

See also: Chevron to purchase Texas refinery owned by Petrobras

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