Brazilian "Super-Giant" Oil Discovery Now Delayed To "At Least 2022" -- July 4, 2016

Updates

July 6, 2016: Petrobras to sell "junk" oil fields off the coast of Sergipe and Ceara states; minimal production. the huge field is the deep water Sergipe. This is an unimportant article but it discusses again the Indian discontent that Petrobras has delayed Sergipe from 2018 to 2022 (see below).

Original Post

 

From Reuters:

Petrobras has warned its Indian partners in a huge offshore project to not expect oil from the site until 2022, a fresh sign of how low oil prices and the state-owned company's corruption scandal and mountain of debt are dragging on Brazil's energy industry.

The previously unreported, four-year delay in the "super-giant" discovery off the northeastern coast of the Brazilian state of Sergipe is forcing India's Oil and Natural Gas Corp and IBV Brasil Petroleo Ltd to seek ways to speed up the Petrobras-led project which has cost them $2.1 billion with no return in sight.

The delay and pressure from the Indian partners is just one of many challenges for new Petrobras Chief Executive Pedro Parente, named by Brazil's interim-President Michel Temer in late May amid an ongoing financial crisis.

In the face of a massive bribery and kickback scandal and Petrobras' $126 billion of debt, Parente has pledged to run the company in a more market-friendly way but has declined to comment on individual projects. He has also promised a revamped investment plan by the end of October - though it is unclear whether it will address the Sergipe offshore standoff.

In April, Petrobras told IBV, a 50-50 joint venture between state-owned Bharat Petroleum Corp and privately held Videocon Industries Inc, that there will be no oil output from Sergipe "until at least 2022," an IBV executive told Reuters. A year ago, Petrobras' promised first oil by 2018. 

From an earlier Reuters story:

Petrobras is the operator and has a 75 percent stake in the prospect, in partnership with India's Oil and Natural Gas Corp , which holds 25 percent.

Deepwater exploration in the Sergipe-Alagoas Basin by Petrobras, ONGC and India's Videocon Industries Ltd and Bharat Petroleum Corp. has resulted in some of Brazil's largest oil discoveries outside the giant finds in the Santos Basin.