Norway’s Equinor and U.S. supermajor ExxonMobil have reached the final investment decision to develop the Bacalhau oilfield in Brazil’s prolific pre-salt area with a US$8-billion investment in phase one, the Norwegian major said on Tuesday.
Equinor and Exxon hold 40 percent each in the Bacalhau oilfield, with Equinor as operator. The field was discovered by Brazilian state oil giant Petrobras in 2012, while Equinor has been operator since 2016.
Under the development plan, Phase 1 will see 19 subsea wells tied back to a floating production, storage and offloading unit (FPSO) located at the field. This will be one of the largest FPSOs in Brazil, with a production capacity of 220,000 barrels per day (bpd) and two million barrels in storage capacity, Equinor said.
First oil from the Bacalhau oilfield is planned for 2024.
The partners in the field, which also include Petrogal Brasil and Pré-sal Petróleo SA (PPSA), have already awarded the main Front End Engineering and Design (FEED) and engineering, procurement, construction and installation (EPCI) contracts.
“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,” Arne Sigve Nylund, Equinor’s executive vice president for Projects, Drilling and Procurement, said in a statement.
“The development of the Bacalhau field is a strategic investment in our global portfolio and has the potential to bring high returns for ExxonMobil, our partners and the Brazilian people,” said Juan Lessmann, Lead Country Manager for ExxonMobil in Brazil.
The sanctioning of the US$8-billion field development by major international oil companies is one of the first such announcements since the International Energy Agency (IEA) said two weeks ago that beyond projects already committed as of 2021, there is no need for new oil and gas fields approved for development if the world hopes to reach net-zero emissions by 2050.