Embed Size (px)
Citation preview
Natural Gas: Exploration and Production
Belo Horizonte, May 27, 2013
Executive Responsible: Roberto Ferreira Borges
Brazil’s best energy
Why natural gas?
Brazil’s best energy
Outlook: Brazil’s energy sources
Indicating use of natural gas:
Brazil: energy sources
Nuclear
Renewable
Gas
Coal
Oil
Nuclear
Renewable
Gas
Coal
Oil
The world: energy sources
Total: 252 million toe
(tons of oil equivalent)
Total: 553.6 million toe
Sources: (1) EPE Ten-year Energy Plan (PDE).
(2) EIA (Energy Information Administration.
Total: 12,476 million toe Total: 17,298 million toe
Sources: EIA (Energy Information Administration.
Production in the USA: revolution
Source: EIA.
Imports from
Mexico and Canada,
and LNG
Onshore
conventional
Unconventional
gas:
15% in 1990
64% in 2011
Conventional
gas:
rapid decline
Shale gas:
2% in 2000
30% in 2011
Offshore
conventional
Alaska Mn
m3/d
ay
Natural gas – Geological outline
Fonte: EIA
Formation of hydrocarbons
Gas
Oil
Water
Oil accumulates in closed structural compartments
Sedimentary basins in Brazil
38 sedimentary basins
>> 10 million sq.km
• 29 principal basins, of
which 15 are offshore
• Concessions granted for
approximately 5%
• Approximately 6% of the
area under concessions
is in development and
production
Source: ANP.
The Brazilian Natural Gas market
Brazil’s best energy
Supply of natural gas in Brazil Includes the isolated systems
Production available,
Southeast
Importation from Bolivia
*Preliminary figures
Production available,
Northeast
Importation, Argentina
Production available,
North
Importation, LNG*
Production available,
Maranhão
Sources: ANP, Abegas, ONS.
Figures for losses and consumption of gas in the NGPUs are after deduction of production available in SE and NE.
Mn
m3/d
ay
Importation of NG from Bolivia
* Gross imports – before deduction of losses and consumption for compression. Sources: YPFB, Mining and Energy Ministry.
Mm
3/d
ay
Via Gasbol Via Cuiabá branch Annual average imported
Importation of LNG M
m3/d
ay
Northeast
LNG
Southeast
LNG
• Preliminary figures.
Source: Brazilian Mining and Energy Ministry
Natural gas demand in Brazil
• Figures for Refining and FAFENs are preliminary.
Losses and consumption of gas in the NGPUs not included.
Sources: ANP, Abegas, MME, ONS.
Mn
m3/d
ay
Refining, FAFENs Industrial Residential and
Commercial
Industrial Industrial GNC,
others
Electricity
generation
Industrial
Brazilian thermal generation
by fuel type
Mn
m3/d
ay
• Others includes Biomass and Gaseous effluents.
Nuclear Diesel Coal Natural gas Fuel oil Others*
Source: ONS.
Brazil: Supply and demand,
March 2013 (preliminary)
Includes the isolated systems. Figures are preliminary.
Brazil
SUPPLY DEMAND
Feb.–Mar Total % % Total Feb.–Mar
2013 88.3 Share Share 88.3 2013
Bolivia Imports Industrial
–7.4% 29.3 33% 31% 27.1 15%
LNG Imports Thermal Power
–26% 11 12% 45% 39.6 –10%
Argentina Imports Cogeneration
–13% 0.9 1% 3% 2.5 –5%
Domestic Supply VNG
6% 47.1 53% 6% 5.2 3%
13%
Refining/ Chemicals
11.2 0%
Losses, adjustments Resid /Commmercial
5.4 2% 1.4 –12%
UPGN* CNG
3.5 1% 1.3 37%
Production available Reinject Burn E&P
56 9.1 3.9 10.9
15% 8% –9% 8% Feb.–Mar 2013
70% 11% 5% 14% % shareSources: ANP, Abegas, M M E, ONS.
Gross production
79.8
March 2013
Million cubic meters / day
Price formation – natural gas
Natural gas price Petrobras formula
Commodity +
transfer +
processing
US
$/M
BT
U
Transport
+
????
* Monthly average, Industrial segment: 50,000 cu.mt./day, São Paulo.
Average exchange rate April 2013: R$ 2.00/US$.
Uses the price actually charged by Petrobras, not the price formula. Source: Gas Energy.
Variable part Fixed part City Gate
price Distribution Final price to Taxes Final price to
Margin* Industry Industry
excl. taxes incl. taxes
Gas price
1Q13
Price formation – Bolivian gas
Contract Transport City Gate Distribution Final price to Taxes Final price to
Price Bolivia + price, margin* Industry Industry
(QDCb) Brazil Brazil excl. taxes incl. taxes
Source: Gas Energy. * Monthly average, Industrial segment: 50,000 cu.mt./day, São Paulo.
Commodity+
transport to
Rio Grande
US
$/M
BT
U
Frontier Gas price
2Q13
Some current market facts ...
The formula price for natural gas imported from Bolivia is now
US$10.14/MBTU at the Brazil city gate.
Domestic natural gas prices have been frozen since May 2011, at
US$9.12/MBTU in April 2013. The most recent discount was 32%. If
these discounts were not applied, the price of natural gas in April
2013 would be US$13.42/MBTU.
In March 2013, 490 million m³ of natural gas was imported to meet
the demand of the tehroelectric generation plants. The average price
of importation (FOB) was US$ 14.64/MBTU.
... More current market facts...
Dispatched Brazilian thermal plants were responsible for generating
average 12.6GW.
As a % of total Brazilian thermal generation:
– The gas-fired plants generated 6.5GW average, or 51%;
– the diesel and fuel oil plants generated 23%.
Henry Hub prices in April 2013 were at their highest monthly
average since 2011, and closed the month at US$4.17/MBTU.
The latest figures for international prices are US$7.18/MBTU in
January 2013, for NBP, US$10.96/MBTU in February 2013 for
Russian gas at the German border, and US$15.09/MBTU in March
2013 for LNG Japan.
The Minas Gerais
Natural Gas market
Brazil’s best energy
Projections of demand
Organic growth Consumption (’000 m³/d)
Average 2011 MG (Includes Thermal plants and Refining) 3,000
Potential market Colunas1
Industrial 1,000
Natural gas light vehicles 2,600
Natural gas heavy vehicles 2,100
Co-generation 1,440
Residential 200
Commercial 300
Climatization 268
TOTAL, POTENTIAL 7,908
Subtotal 1 (Organic + potential) 10,908
Structuring projects Colunas1
Steel (Blast furnaces) 3,200
Steel (Sponge iron) 5,000
Raw materials / natural gas 15,000
Glass 200
White ceramics 100
Foods 100
Paper and pulp 100
Aluminum 600
Typical thermal plant (500MW) 2,500
TOTAL, STRUCTURING PROJECTS 26,800
Subtotal 2 (Organic + Potential + Structuring) 37,708
Projections of demand
These projections envisage a horizon of 2020 for the effort for growth through induced
(potential) consumption via the network, and implementation of structuring projects.
’000
m3/d
ay
Organic Potential Structuring projects
Pricing of NG vs. Potential markets
Petro-
chemicals
Steel
VNG -
light
VNG –
heavy
Co-generation
Industrial
Climatization
Present price - Industrial Attractive price - Steel
US
$/M
BT
U
The São Francisco Basin
Brazil’s best energy
The São Francisco Basin
Source: ANP.
The São Francisco
basin is in the central
area of Brazil, including
parts of the states of
Bahia, Minas Gerais and
Goiás.
Total area:
approximately
350,000km².
São Francisco basin: the area
24
Source: ANP
KEY
Wells
Block operators
São Francisco Basin
Blocks with concessions awarded
26
Rounds
7th Round
10th Round
Municipalities of the São Francisco Basin
0 75 150 225 300
Kilometers
115 municípalities of Minas Gerais state Area of Sudene
Source: GeoCemig.
27
São Francisco Basin – Agents
SF-T-102
SF-T-85 SF-T-86
SF-T-96 SF-T-95 SF-T-94 SF-T-92
SF-T-101 SF-T-105 SF-T-106
SF-T-111 SF-T-112
SF-T-104
SF-T-114 SF-T-115
SF-T-118 SF-T-119 SF-T-120 SF-T-121
SF-T-124 SF-T-125 SF-T-126 SF-T-128
SF-T-130 SF-T-131 SF-T-132 SF-T-133 SF-T-134
SF-T-137 SF-T-138 SF-T-139
SF-T-143 SF-T-144
SF-T-127
SF
-T-8
0
SF-T-81 SF-T-82
SF-T-83
SF-T-93
Codemig / Imetame / Orteng / Sipet
Cemig / Codemig / Imetame
Cemig / Codemig / Imetame / Orteng / Sipet
Consortia
Shell
Petra
Petrobras / BG
Cisco Oil & Gas
Other companies
General information:
Area of the Basin (Minas Gerais state and
Bahia State) 300,000 km2
Area of each block: 3,000 km2
Municiplaities in Cemig’s blocks : 19
28
São Francisco Basin – wells
Codemig / Imetame / Orteng / Sipet
Cemig / Codemig / Imetame
Cemig / Codemig / Imetame / Orteng / Sipet
Consortia
Shell
Petra
Petrobras / BG
Cisco Oil & Gas
Other companies
SF-T-132
SF-T-120
29
Wells drilled
São Francisco Basin: results Well's name
(ANP)
Well's name
(Operator)Operator Block Municipality Depth Gas Show Driller Start Date Finish Date Conclusion Date
1IMET7MG 1ALE1MG Imetame SF-T-104 IBIAÍ 1833 YES IMETAME_ENERGIA_01 23/12/2012 16:00:00
1PTRA5MG 1SJL1MG Petra Energia SF-T-105 SÃO JOÃO DA LAGOA 1450 YES BCH ENERGY 8 06/03/2012 13:00:00 06/05/2012 09/05/2012
1PTRA9AMG 1MC1AMG Petra Energia SF-T-106 MONTES CLAROS 1166 YES SONDA DE PERFURAÇÃO ELF-01 19/05/2012 21:50:00 01/06/2012 06/06/2012
1BRSA948MG 1AMS1MG Petrobras SF-T-111 JOÃO PINHEIRO 3590 NO NA 28/05/2011 00:00 13/10/2011 00:00 13/10/2011 00:00
1BRSA1005MG 1PDR1MG Petrobras SF-T-112 BRASILÂNDIA DE MINAS 2846 YES SONDA CONVENCIONAL 109 02/11/2011 00:00 25/05/2012 00:00 02/07/2012 00:00
1-BRSA-871-MG 1OSA1MG Petrobras SF-T-112 BRASILÂNDIA DE MINAS 3408 YES NA 24/09/2010 00:00 08/04/2011 00:00 10/05/2011 00:00
1IMET8MG 1CNF1MG Imetame SF-T-114 VÁRZEA DA PALMA NA YES IMETAME_ENERGIA_01 28/02/2013 19:20
1PTRA10MG 1RCP1MG Petra Energia SF-T-115 CLARO DO POÇÕES 1377 YES BCH ENERGY 8 22/05/2012 15:00:00 14/06/2012 24/06/2012
1PTRA11MG 1CT1MG Petra Energia SF-T-118 PRESIDENTE OLEGÁRIO 2790 NO BCH Energy 2 01/06/2012 04:00:00 09/08/2012 12/08/2012
1PTRA19MG 1RFO1MG Petra Energia SF-T-118 JOÃO PINHEIRO NA FAXE-1 24/01/2013 06:30:00
1PTRA3MG 1JP1MG Petra Energia SF-T-118 JOÃO PINHEIRO 2519 NO BCH Energy 2 14/08/2011 08:00:00 04/05/2012 13/05/2012
1PTRA8MG 1RV1MG Petra Energia SF-T-118 JOÃO PINHEIRO 2422 YES Cowan-01 24/04/2012 07:30:00 26/07/2012 31/07/2012
1PTRA22MG 1FCA1MG Petra Energia SF-T-118 JOÃO PINHEIRO NA GENESIS-1 08/03/2013 04:15:00
1PTRA17MG 1CP1MG Petra Energia SF-T-121 LASSANCE NA YES HYPER1 08/12/2012 03:30:00 24/01/2013
1PTRA12MG 1RJ1MG Petra Energia SF-T-124 PRESIDENTE OLEGÁRIO 3870 YES FAXE-2 06/06/2012 23:35:00 07/10/2012 18/10/2012
1PTRA15MG 1PO1MG Petra Energia SF-T-125 PRESIDENTE OLEGÁRIO 2904 NO HYPER1 03/10/2012 23:00:00 14/11/2012 18/11/2012
1PTRA16MG 1RAQ1MG Petra Energia SF-T-125 PRESIDENTE OLEGÁRIO 3160 YES FAXE-1 16/11/2012 20:30:00 01/01/2013
1PTRA2MG 1RP1MG Petra Energia SF-T-125 JOÃO PINHEIRO 3000 YES FAXE-1 14/02/2012 03:30:00 16/06/2012 27/06/2012
1PTRA21MG 1RSA1MG Petra Energia SF-T-126 JOÃO PINHEIRO NA YES FAXE-2 30/01/2013 13:00:00
1PTRA1MG 1RioBicudo1MG Petra Energia SF-T-128 CORINTO 1536 YES NA 25/06/2011 00:00 17/11/2011 00:00 14/12/2011 00:00
1PTRA13MG 1PM1MG Petra Energia SF-T-130 PATOS DE MINAS NA YES SONDA DE PERFURAÇÃO ELF-01 20/06/2012 13:10:00 06/01/2013
1PTRA14MG 1SZ1MG Petra Energia SF-T-131 PRESIDENTE OLEGÁRIO 3182 YES FAXE-1 14/07/2012 04:00:00 14/10/2012 01/11/2012
4PTRA23MG 4-SZ-2-MG Petra Energia SF-T-131 PATOS DE MINAS NA HYPER1 19/03/2013 09:00:00
1-ORT-1-MG 1IND1MG Orteng SF-T-132 MORADA NOVA DE MINAS 2493 YES NA 22/07/2010 00:00 06/10/2010 00:00 20/10/2010 00:00
1CISC1MG 1CISCO1 Cisco Oil and Gas SF-T-133 MORADA NOVA DE MINAS NA YES Sonda Rotativa Wirth 05/11/2011 00:00 20/10/2012 00:00 09/12/2012 00:00
1PTRA18MG 1MGA1MG Petra Energia SF-T-134 MORRO DO GARÇA NA YES GENESIS-1 23/12/2012 02:00:00
1PTRA4MG 1QGE1MG Petra Energia SF-T-137 QUARTEL GERAL 2354 YES Cowan-01 29/12/2011 03:30:00 15/03/2012 28/03/2012
1PTRA6MG 1RL1MG Petra Energia SF-T-138 MARTINHO CAMPOS 1077 YES Cowan-02 09/03/2012 15:00:00 18/04/2012 23/04/2012
1PTRA20MG 1SRS1MG Petra Energia SF-T-143 SANTA ROSA DA SERRA ND YES GENESIS-2 25/01/2013 04:30:00
1PTRA7MG 1RSP1MG Petra Energia SF-T-85 JAPONVAR 923 NO SONDA DE PERFURAÇÃO ELF-01 10/03/2012 04:30:00 09/04/2012 22/04/2012
30
Cemig and Natural Gas
Natural gas in Cemig’s structure
1986: Gasmig founded (landfill biogas distribution)
1992: Gasmig starts distribution of natural gas
2008: Cemig and partners win 6 blocks in the 10th Round of ANP
Auctions [4 in the São Francisco Basin (gas), 1 in the Recôncavo
Basin (oil) and one in the Potiguar Basin (oil)]
2009: Cemig creates Gas Division
2010: Cemig creates Directorate of Chief Officer for the Gas Division
Cemig in the sector
Cemig’s positions in the Oil & Gas value chain
Production
Production Transport
Exploration
Refining
Consumption
Consumption
Processing Transport
Oil
Natural
Gas
Cemig Holding
Gasmig
Cemig activities:
Participation in the
10th Round of ANP Concession Bids
Brazil’s best energy
Participation in the 10th ANP Round
Source: ANP.
35
Oil & Gas E&P – Brazil’s history to date
Constitutional
Amendment
No. 9
Law 9748
“the Oil Law”:
created
CNPE & ANP
ANP
Round 0
Laws: 2565/11
Distribution of
royalties Round 7
Round 8
(incomplete)
Round 10
(onshore)
Round 6
Round 5 Round 4
Round 3
Round 2
ANP
Round 1
Draft Law
12351 – Production sharing contracts
12304 – Pré-Sal Petróleo S.A.
12275 – Capitalization of Petrobras
Projects of Cemig and its partners
Source: ANP.
36
Blocks:
São Francisco
Basin
Potiguar
Basin
Recôncavo
Basin
Blocks:
Blocks:
Projects of Cemig and its partners
* Indicates name of the block Operator.
Percentage interests in the Blocks
37
Projects of Cemig and its partners
An exploration consrtium was created for each Exploratory Block.
Cemig has participation of 24.5% in each consortium.
Investments planned (Financial guarantees at the time of the auction)
39
Block StateBonus paid,
R$
Minimum
Exploration Program
(PEM)
in Work Units (UTs)
Estimated
MEP, R$
Hydrocarbon
expected
POT-T-603 RN 2,001,115 2,039 4,078,000 Light oil
REC-T-163 BA 2,501,115 2,235 5,600,000 Light oil
SF-T-104 MG 4,000,000 3,265 20,225,000 Gas
SF-T-114 MG 2,001,115 3,265 20,225,000 Gas
SF-T-120 MG 400,000 1,000 4,000,000 Gas
SF-T-127 MG 401,115 1,000 4,000,000 Gas
Activities in Progress
– Recôncavo + Potiguar
Brazil’s best energy
Potiguar basin – POT-T-603
Minimum Exploration Program (PEM) activities concluded.
Analyses of results of drilling of 2 exploratory wells completed.
Area being returned to ANP, since its shows no commercial feasibility.
41
Operation POT-T-603
2D Seismic (km) 3.76
3D Seismic (sq. km.) -
3D Seismic Reprocessing (sq. km.) 15
Wells 2
Recôncavo basin – REC-T-163
Minimum Exploration Program (PEM) activities concluded for the first
exploratory period.
Analyses of results of drilling of 1 exploratory well concluded.
Acceptance by ANP of statement of interest in continuing to the 2nd
Exploratory Period.
Commitment to drill one more well to assess resources.
42
Operation REC-T-163
2D Seismic (km) -
3D Seismic (sq. km.) 25
3D Seismic Reprocessing (sq. km.) -
Wells 1
On location –
Recôncavo and Potiguar basins
Source: GS
POT-T-603 Well1
POT-T-603 Well 2
REC-T-163 Well 1
Activities in progress
– São Francisco
Brazil’s best energy
São Francisco basin – Cemig
São Francisco basin:
Blocks:
SF-T-104
SF-T-114
SF-T-120
SF-T-127
45
Wells drilled
São Francisco basin – Cemig
Activity to date
In progress: Analysis of the data obtained from drilling of blocks and
profiling in Blocks SF-T-104 and SF-T-114.
Notice given to ANP of interest in proceeding to 2nd exploratory period in
all 4 blocks.
(*) In progress.
46
Operation SF-T-104 SF-T-114 SF-T-120 SF-T-127
2D Seismic (km) 347.11 389.8 213.5 150.2
3D Seismic (sq. km.) - - - -
3D Seismic Reprocessing (sq. km.) - - - -
Wells 1 1 - -
Water quality studies around well
locationYes Yes - -
Geochemical analyses of total gas Yes Yes Yes Yes
Satellite image spectral analysis of to
map soil gas emissionsYes(*) Yes(*) Yes(*) Yes(*)
Investments yet to be made (R$ mn) (amounts updated)
21 65
Total investment
Cemig
Sócios
6.5
6
1.5
1
2.5
3.5
Investment per block
SF-T-104 SF-T-114 SF-T-120
SF-T-127 POT-T-603 REC-T-163
47
Cemig Partners
São Francisco basin – On location
Source: GS.
SF-T-120 – Seismic study
SF-T-104 – Alegria Well
SF-T-114 – Confiança Well
48
São Francisco basin - Next steps
Evaluate potential
Organic material interval
– Potential presence of
hydrocarbons.
Review of data
– Seismic
– Geological, geochemical
– Geomechanical
Petrophysical
– Mineralogy, Φ, TOC,
– RO, Brittle, k
– Fluid typing.
Define data requirements
– Core, well log etc.
First pass – field analogs
Caracterization of the formation
Reservoir extension
Estimated principal feature directions
Identification of natural fractures
Estimation of mechanical properties
Geochemical properties
Petrophysical properties
Estimated mineralogy
– Spectral gamma ray – Chemostratigraphy – Cores
Determine analog
Validation and assessment of
data
Drilling
– Casing program
– Bit selection
– Mud program
– Trajectory
– Sidetracking
– Data acquisition
Hydraulic Fracturing
– Completion perforation
strategy (If necessary
– Material selection
– Fluids, additives &
proppant
– Stimulation design
– Job Size, HHP, Logistics
& Environmental Impact
Evaluation
– Production Potential
– Frac Monitoring
Potential
exploitation program
Lessons learned / Best
practices
Well placement
– Reservoir drainage
Well architecture to
maximize
production
– Vertical / high angle
– Horizontal
– Multilateral
Water management
Logistics
49
Cemig in the sector
Cemig’s positions in the Oil & Gas value chain
Production
Production Transport
Exploration
Refining
Consumption
Consumption
Processing Transport
Oil
Natural
Gas
Cemig Holding
Gasmig
Cemig activities:
Gasmig: equity ownership
59.57%
40.00%
0.43%
Cemig
Gaspetro
MBH
51
Gasmig – Market
Volume (2012)
83.0%
12.5%
3.5% 1.0%
Industrial Termelétricas GNV Uso geral
Revenue (2012)
75.6%
20.6%
3.1% 0.7%
Industrial Termelétricas GNV Uso geral
52
Thermal plants General use VNG
Thermal plants VNG General use
Gasmig – growth over 4 years
2009 2010 2011 2012
Length of network (km) 408 795 814 840
Sales volume (million m3/year) 460.4 682.2 1,040.9 1,323.0
Clients in operation 274 292 309 314
53
Gasmig – Gas pipeline network
54
Key: EXISTING DISTRIBUTION NETWORK
EXISTING GAS PIPELINE NETWORK
Thermoelectric power plant
CITY GATE
NATURAL GAS WELL
LNG REGASIFICATION STATION
SÃO PAULO STATE
TO
RIO GRANDE DO SUL
SÃO PAULO STATE
MINAS GERAIS
Gasmig – Distribution system
SUL
DE
MINAS
D.C.
MANTIQUEIRA D.C.
RMBH Dist. Center
“STEEL VALLEY”
(VALE DO AÇO) D.C.
TRIÂNGULO
Dist. Center.
55
SÃO PAULO
STATE
MINAS GERAIS
SÃO PAULO STATE
Key:
EXISTING DISTRIBUTION SYSTEM
DISTRIBUTION SYSTEM UNDER CONSTRUCTION
DISTRIBUTION SYSTEM UNDER STUDY
EXISTING GAS PIPELINE
GAS PIPELINE UNDER STUDY
GAS PIPELINE UNDER CONSTRUCTION
THERMAL POWER PLANT
CITY GATE
The current challenges
Brazil’s best energy
Challenges – Exploration & Production
57
Exploration Exploration
New exploration frontiers
Advanced exploration techniques Advanced exploration techniques
Infrastructure and logistics
Challenges – Markets
58
Attract the chemicals industry
Expansion
of markets
Evaluation of GTL technology
Build thermal power plants
Challenges – Sustainability
59
Use water appropriately
Sustainability Sustainability
Ensure well structure stability
Effective communication
Environmental aspects – Myths
Myth: Chemicals used in fracturing contaminate water tables.
Reality: Chemical products used in fracturing are the same as
products used in the food industry.
Myth: The area necessary for Unconventional exploration is much
greater than the area needed for Conventional exploration.
Reality: The location area of wells for Unconventional is indeed larger
when compared with Conventional. In Unconventional the same
location is used for drilling of multiple horizontal wells.
Myth: Hydraulic fracturing uses enormous quantities of water.
Reality: Currently, 5 liters of water are used per MMBTU produced in
Unconventional extraction. This number is small compared to other
energy sources such as, for example, biofuels. Techniques for
reduction of use, re-use and recycling are on the agenda.
Brazil’s best energy
Investor Relations
Telephone: (55‐31) 3506‐5024
Fax: (55‐31) 3506‐5025
http://ri.cemig.com.br
