Bacalhau oil field : $8bn phase 1 development approved by Equinor and partners

Equinor and its partners have approved the phase 1 development of the Bacalhau oil field in the Santos Basin, offshore Brazil with an investment of around $8 billion.

The Bacalhau field spans across the BM-S-8 and the Norte de Carcará licenses. First oil from the offshore Brazilian oil field is targeted for 2024.

Equinor is the operator of the Bacalhau oil project with a stake of 40%. The other stakeholders in the offshore development are ExxonMobil (40%) and Galp‘s subsidiary Petrogal Brasil (20%).

Discovered in 2012 by Petrobras, Bacalhau is located approximately 185km off Sao Paulo coast. It is contained in water depths of 2,050m.

Arne Sigve Nylund – Equinor executive vice president for Projects, Drilling and Procurement said: “This is an exciting day. Bacalhau is the first greenfield development by an international operator in the pre-salt area and will create great value for Brazil, Equinor and partners. Good cooperation with partners, Brazilian authorities and suppliers has resulted in an investment decision for the Bacalhau field.

“Bacalhau is a globally competitive project with a break even below USD 35 in a key energy region. Estimated recoverable reserves for the first phase are more than one billion barrels of oil.”

The Bacalhau oil field FPSO to be delivered by MODEC. Photo courtesy of Equinor ASA.

The phase 1 development of the Bacalhau oil field involves drilling of 19 subsea wells, which will be tied back to a floating production, storage and offloading unit (FPSO) moored at the field.

The Bacalhau FPSO will have a production capacity of 220,000 barrels per day and a storage capacity of two million barrels. It will be delivered by Japanese offshore floating platform provider MODEC under a contract announced earlier this year.

MODEC will operate the Bacalhau FPSO for the first year, after which Equinor will look to operate the facilities till the end of the license period.

While the stabilized oil produced from the Bacalhau field will be offloaded to shuttle tankers, gas will be re-injected in the reservoir, said Equinor.

Thore Kristiansen – Galp Upstream COO said: “Bacalhau is a world class offshore project, with low breakeven and low carbon emissions. This project will significantly contribute to Galp´s continued competitive upstream growth.

“The investment is a testament to Galp’s commitment to continue to grow in Brazil, and its success will have positive returns for all of Galp’s stakeholders in the country and beyond.”