With Brazilian oil project approved, BW Energy sets sights on doubling output by 2028

Oslo-listed oil and gas E&P player BW Energy has taken the final investment decision (FID) for a development in the Campos Basin field offshore Brazil. The project will encompass an integrated drilling and wellhead platform (WHP) and a refurbished floating production storage and offloading (FPSO) unit.

The Maromba field development targets 500 million barrels of oil in place in what the Norwegian player says are highly delineated and tested Maastrichtian sands. With an expected plateau production of 60,000 barrels of oil per day, the first oil is scheduled for the end of 2027. BW Energy hopes to more than double its total net production by 2028 thanks to the project.

As explained, the “capex-efficient” development will feature a converted drilling jack-up, serving as WHP, with up to 16 well slots and production- and test-flowlines connected to the redeployed FPSO BW Maromba, formerly known as Polvo.

BW Energy CEO Carl K. Arnet said: “We have spent time on optimising the Maromba development plan and concluded on a highly competitive concept with a repurposed jack-up platform and FPSO, repeating the approach we very successfully applied in Gabon.

“Maromba will enable BW Energy to deliver industry-leading organic production growth and position the Company for further low-cost developments of known potential developments. We expect to unlock significant shareholder value in all realistic oil price scenarios.”

The FPSO’s redeployment was made possible thanks to the settlement of an arbitration between BW Energy and Petro Rio O&G Exploração e Produção de Petróleo in early April. BW Offshore expects to receive approximately $36 million as a result of the settlement.

Designed with one million barrels of storage capacity, the FPSO Maromba will have a total liquid capacity of 100,000 barrels per day, an oil production capacity of 65,000 barrels per day, and a water treatment capacity of 85,000 barrels per day.

According to BW Energy, the unit is undergoing initial refurbishment and life extension work following the completion of condition assessment and FEED at the COSCO yard in China. 

Furthermore, the operator has agreed to purchase a jack-up with complete leg extensions for $107.5 million to use at Maromba. The rig is slated to undergo a limited conversion to serve as an integrated drilling and wellhead platform before being installed on the field.

“The repurposing of existing energy infrastructure enables reduced investments and shorter time to first oil with significantly reduced greenhouse gas emissions in the development phase, as compared to installing new production assets,” noted Arnet. 

Maromba is located 100 kilometers off the Brazilian coast in the Campos Basin. Nine wells were drilled in the license between 1980 and 2006, with oil found in eight of these across various reservoirs. The development project targets an estimated 123 million barrels of 2P reserves, with potential additional resources from other reservoirs to be appraised along the development.

BW Energy acquired a 100% ownership in the field in 2019 for a total of $115 million, of which $85 million remains to be paid to the sellers–Chevron and Petrobras–at predefined milestones. Additionally, Magma Oil holds a 5% back-in right in the Maromba licence, which is expected to be executed upon first oil.  

The development comprises six initial Maastrichtian horizontal production wells with dry trees and artificial lift by downhole electric submersible pumps (ESPs). Production will be transferred from the WHP to be installed in approximately 150 meters of water depth with full drilling facilities, to the spread moored FPSO Maromba for treatment, storage and offloading to shuttle tankers.

Once installed, the infrastructure will enable the planned secondary six-well drilling campaign and provide potential for future development phases with what the operator says are low-cost infill wells, potential water injectors, as well as allowing appraisal and production of multiple proven reservoirs outside the main Maastrichtian resources.  

The investment is anticipated to total around $1.5 billion, with $1.2 billion for the initial development and a further $0.3 billion for the secondary drilling campaign. This includes $1 billion before first oil and a further $200 million to complete the initial drilling campaign by the end of 2028. After that, $300 million is planned to be spent on the additional six wells in the second campaign, with completion before the end of 2030.  

As explained by the operator, the development will be financed through existing cash and undrawn facilities, cash flow from operations, and separate infrastructure financing solutions related to the FPSO and WHP. Financing alternatives, including a corporate facility, reserve-based lending, trader financing, and the potential issuance of bonds, are also being explored.  

BW Energy’s main shareholder, BW Group, has also committed a $250 million shareholder loan facility. 

The Norwegian firm says it is in the process of securing authorizations from the Brazilian oil and gas regulator, ANP, and the environmental agency, IBAMA. The next steps will include contracting long-lead items and services and finalizing the financing agreements. 

This follows BW Energy’s “drilling success” in the Dussafu license off the coast of Gabon. As stated in late April by Panoro Energy, BW Energy’s partner in the field, the second appraisal sidetrack well, drilled with the Borr Norve jack-up drilling rig, encountered oil in the Gamba formation.