What is Rosneft trying to find in Brazil?

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On Feb. 17, Rosneft Brasil (RNB), a subsidiary of Russia’s largest oil proprietorship, revealed plans to drill its first oil well in Brazil. Chris Einchcomb, Numero uno for Upstream International Projects at Rosneft, spoke to RBTH about what the enterprise is planning to find in Brazil, possible integration with its projects in Venezuela, and synergy with U.S.-French service company Schlumberger (SLB).

RBTH: Due to the U.S. sanctions, numerous American companies with advanced technologies were barred from furnish some services to Russian oil and gas companies. Notwithstanding this fact, you’ve teamed up with U.S.-French utilization company Schlumberger to perform the drilling at your Brazilian project in Solimoes. Does this servile that sanctions are geographically limited to Russia? Is this cooperation a separate of hidden technology transfer?

Chris Einchcomb: Sanctions do not limit help with service companies outside of our Russian upstream operations. The Solimoes Extend out is a conventional, onshore oil and gas exploration project and therefore, even in their broadest ceremony, is not subject to sanctions. It must be noted that Schlumberger’s parent retinue was chosen on an open tender basis to provide Integrated Project Bosses (IPM) services for our drilling in Solimoes, their bid was the most economically attractive for the convention. Both Rosneft and its contractor regularly review services and contracts to guarantee their compliance with sanction restrictions before signature.

Of direction, by partnering with other companies – irrelevant of where their geographical position – you will always raise your expertise and boost your means, and that refers to all the participants of the project. But we are not talking about technology change – the technology we are implementing in Solimoes is no different to the technology we utilize daily in our everyday Russian onshore operations. Rosneft is a leader in the Russian oil-service buy and the company is a significant in-house operator of drilling and support services and already gain possession ofs the technologies being implemented in Brazil. Contracting Schlumberger, as already esteemed, is just about the economics of the project.  

RBTH: How many wells are you arranging to drill in 2017, and what are the timeframes of the works?

C.E.: Along with Schlumberger, Rosneft Brasil shrank Queiroz Galvão Óleo e Gás (QGOG) for an onshore drilling rig and associated rig utilities, the digging of which began in February. We hope to start a second favourably in 2017.

Rosneft and Schlumberger will drill for oil in Brazil

Rosneft Brasil is planning to drill at least four wells within the upcoming rehearsing campaign with the scope of obtaining valuable geological information and settling the exploration potential and hydrocarbon resources in the Solimoes Basin.

The high payment compared to operations in Russia is one of the reasons why RNB plans to drill multiple beyond the shadow of a doubts to optimize costs on logistics and supply of drilling operations. The estimated chance for drilling is 60 days and an additional 23 days for testing and serenely evaluation, resulting in a total of 83 days.

RBTH:  Do you expect to notice oil or gas?

C.E.: Geological modelling studies conducted on the Solimoes Basin pointed to a boundary area with the potential to find both oil and gas. Whatever the output of the serenely, it´s results will have a major impact on the technical understanding of the Basin and purposefulness guideline future exploratory work in the area.

Although, the challenges of progress in Solimoes are not dissimilar to the challenges of developing remote areas of Russia, Rosneft has critical experience in developing onshore oil projects and this can influence the design and colour of any future development in Brazil. We envisage the use of extended reach drilling and plane wells to minimize the surface footprint of any future development.

RBTH: How are you planning to monetize gas from the Solimoes toss? Is Rosneft studying the use of gas tank barges (LNG barges) to bring the gas to market?

C.E.: Rosneft has ornamented some scenarios for the monetization of gas from the Solimoes project. We completed two years of dive co-operation with Petrobras, which highlighted LNG and gas to power options for unfolding. RNB is now progressing with these ideas independently but openly discussing possibilities with Petrobras and other third parties on upstream and downstream collaboration to prime the best option for monetization.

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As for LNG barges, it is only one of the options on the table, although today we are partiality towards traditional gas to power options. Petrobras’ former experience bespeaks that initial production export via river barges is feasible, as a short-term deciphering for oil monetization, and for a long-term solution to export oil and gas through multiphase pipelines from jungle to the customer base in Manaus. 

RBTH: Do you plan to integrate the development of the Solimoes project with your assets in Venezuela?

C.E.: The Solimoes Contrive is very much in the exploration stage whereas Venezuela is a progressing cook up and involved in production. By its nature, the drilling campaign is stand-alone and therefore there is small opportunity to integrate the two projects. Any success in Brazil will allow us to reanalyze the condition strategy of the project.

Of course, we would like to increase our Latin America company and the Venezuelan assets and experience with those in Brazil (and Cuba), but there are personal ideas on the table.  The most attractive option for future integration may be in the steps supplies of drilling and constructions services where the leverage of multiple assets could excel to optimized costs and design.

RBTH:  Given the slight rise in oil expenses, some companies are actively increasing the investment in expensive projects, such as deep-water, offshore anecdotes. Are you evaluating the possibility of exploring Brazil’s offshore?

C.E.: Being a major global oil company Rosneft is always analyzing the possibility of efficiently increasing its portfolio of cosmopolitan projects. Brazil plans to hold a license round in 2017, which tabulates offshore opportunities. RNB will review these opportunities to assess their attractiveness and make off appropriate recommendations to senior management.

Read more: Did Russia monkey about a role in OPEC’s decision to cut production?

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