Seeking Alpha

Alan von Altendorf's  Instablog

Alan von Altendorf is president and managing director of CWSX, L.L.C., an oil & gas exploration consulting firm based in Houston. Their geology and geophysics ("G&G") team have a 20-year track record of picking successful drilling locations for major international oil companies.
My business:
CWSX, L.L.C.
My blog:
World Oil G&G
  • Tupi Shut Down, Sugar Loaf Dry Hole 3 comments
    Aug 24, 2009 11:43 PM | about stocks: PBR, XOM, HES
    I've been busy doing research and preparing for a trip to Europe, so forgive me for missing last month's E&P news from Brazil. Readers will perhaps recall that I said Exxon would make or break the ultradeep pre-salt story.

    And so they have, with a timely tragi-comic assist from Petrobras.

    RIO DE JANEIRO (Reuters) - A consortium of companies failed to find oil in deep waters off Brazil's coast, officials said Wednesday, a sign the South American nation's push to become an energy exporter is still fraught with risks.

    The news came a day after state-run Petrobras said it suspended production at a pilot well in the massive Tupi field, highlighting the challenges of pumping crude through a thick layer of salt miles below the ocean's surface.

    Such setbacks may prove a blow to government assertions that Brazil's sub-salt fields have no exploration risk -- a key argument for a pending legal overhaul that would change terms for oil companies investing in new offshore projects.

    A consortium including Exxon Mobil, Hess Corp and Petrobras did not report an oil find in the Guarani well of BM-S-22 bloc after drilling there, according to statements by Hess and Exxon Mobil.

    A Deutsche Bank report released Wednesday put the total cost of the well at $140 million.

    Exxon Mobil, operator of the project, said in an e-mailed statement: "We are evaluating the results of the BM-S-22 drilling program in order to plan a location of a third well to help us further evaluate the BM-S-22 block."

    On Monday, Petrobras said it had to halt production at a well in the Tupi field, which [they claim] contains at least 5 billion barrels of oil, because of an equipment problem. It did not say when the well would be functioning again.

    The incidents demonstrate two key risks of developing sub-salt fields -- the chance oil reserves may be less than expected and the difficulty of producing under deep water at extreme temperatures and high pressures.

    74.125.155.132/search?q=cache:Cx-R4olcbF...

     


    July 22 (Bloomberg) -- A Brazilian oil well drilled by Exxon Mobil Corp in the country’s so-called pre-salt offshore fields which showed no sign of oil was "a mistake," Brazilian Energy Minister Edison LoBao said today.

     

    Petroleo Brasileiro, the state-controlled oil company, recommended the well be drilled in a different location, Lobao said today in an interview in Brasilia. "The dry well occurred because they drilled in the wrong place. It was a mistake," he said. "There is no risk with the pre-salt."

    http://www.blooomberg.com/apps/news?pid=20601072&sid=aquzUL8D9egA


    Bwahaha. No risk with pre-salt, eh?

    Disclosure: no position long or short in any of the companies discussed.

    Themes: Brazil, Exploration Production Stocks: PBR, XOM, HES
Back To Alan von Altendorf's Instablog HomePage »

Instablogs are blogs which are instantly set up and networked within the Seeking Alpha community. Instablog posts are not selected, edited or screened by Seeking Alpha editors, in contrast to contributors' articles.

This post has 3 comments:

  •  
    That's worrying as Brazilian oil is essential to keep up with demand.
    Aug 25 04:32 AM | Link | Reply
  •  
    Preliminary results from deepwater drilling at a promising Santos Basin exploration block were disappointing, failing to confirm the presence of hydrocarbons, BG Group said Monday. BG Group said that wireline logs at the Corcovado-2 prospect in the BM-S-52 exploration block failed to test positive, despite signs of natural gas during drilling. The tests were preliminary, and a complete evaluation of the results was being done, BG said. The wildcat well was drilled in the BM-S-52 block, where BG is lead operator with a 40% stake and Brazilian state-run energy giant Petrobras holds a 60% share.

    That was the same block that holds the Corcovado-1 discovery, which previously tested positive for light oil and natural gas. BG has returned to the Corcovado-1 prospect to conduct flow tests on the well. Testing at Corcovado-1 was halted after higher-than-expected pressures forced the company to install well casings. Corcovado-2 was drilled about 14 kms northeast of the Corcovado-1 discovery, and on the downward dip of the reservoir structure. The prospect was aimed at delineating the size of the Corcovado structure. A decision on further drilling on the block will be made upon conclusion of testing at Corcovado-1.

    While BG declined to characterise Corcovado-2 as a dry well, it was the second high-profile failure in the promising Santos Basin subsalt region in as many months. In July, ExxonMobil and Hess Corp. also announced a dry well at the Guarani Prospect.

    www.energy-pedia.com/a...
    Aug 25 10:33 AM | Link | Reply
  •  
    This joke is getting funnier by the minute. Upstream report:
    www.upstreamonline.com...
    ----------------------
    Petrobras has drilled a duster in the much-touted exploration fairway.

    Petrobras drilled the wildcat to a total depth of 6375 metres in ultra-deep water Block BM-S-17 in mid-August and no discovery notice was filed, a well-placed source at the country’s National Petroleum Agency (ANP) told Upstreamonline, speaking in condition of anonymity.

    The block is 100%-owned by Petrobras.

    “The BM-S-17 prospect was a dry hole. That’s the evaluation inside the ANP,” said the source, adding the block is located a few kilometres south-west of BM-S-22, which is in the heart of the giant Sugarloaf pre-salt structure.

    If confirmed, it will be third dry well spudded in the Santos basin pre-salt cluster in less than 60 days.

    In early July, ExxonMobil’s Guarani probe in BM-S-22 earned the dubious distinction of becoming the first miss in the area since the play was opened.

    And just three days ago, UK gas producer BG Group said that tests on the Corcovado-2 prospect in Block BM-S-52 did not confirm the presence of hydrocarbons, despite traces of natural gas found in early assessments.

    The ANP source said he believed the the government "probably" told Petrobras to remain quiet over the BM-S-17 well, as a dry hole would weaken claims that the entire pre-salt structure could be full of oil and is a zero risk scenario.
    ------------
    Aug 27 01:24 PM | Link | Reply
Full index of posts »
Latest Followers

StockTalks

  • Iran incursion takes Iraq oilfield. Could be a tripwire. Raising Q1 crude outlook to $150 barrel without Israeli attack, $300 if war.
    Dec 18, 2009
  • Lowering my target for crude to $65 on Mexican hedge deal, deflation threat.
    Dec 09, 2009
  • Time to polygraph the BLS political hacks and offer a bounty for whistleblowers.
    Dec 04, 2009
More »
Posts by Ticker
APC, BP, CEO, COP, CRNCY.PK, HAL, HES, HUSKF.PK, PBR, PTR, RDS.A, SHI, STO, TUWLY.PK, USO, XOM

Latest Comments


Most Commented
  1. The Tragedy of 21 Darts (4 Comments)
  2. Tupi Shut Down, Sugar Loaf Dry Hole (3 Comments)
  3. Is Exxon Betting on $100 Oil? (2 Comments)
  4. World Oil Snapshot (1 Comment)
  5. Main Street down and out? (1 Comment)
Posts by Themes
Brazil, Economy, exploration and production, Exploration Production, oil, oil exploration and production, oil exploration production, oil price, sec rules, US Market
Instablogs are Seeking Alpha's free blogging platform customized for finance, with instant set up and exposure to millions of readers interested in the financial markets. Publish your own instablog in minutes.