Petrobras begins extended well test on Iara discovery

Petrobras has announced the start of an extended well test (EWT) on the Iara discovery, offshore Brazil, on 21 June, with an initial production rate of 29,000 bpd.

This is similar to rates experience on other wells in the Santos pre-salt basin, including Lula on the same block, BM-S-11. Petrobras is the operator of the block (65%) with BG Group (25%) and GALP (10%).

Commercial development?

This is the first EWT on Iara, and will provide data for the development of the discovery. The Evaluation Plan expires at the end of 2014, at which time the consortium must submit the declaration of commerciality.

At the time of discovery in 2008, BG indicated gross recoverable resources of 3-4 billion boe. Further drilling led to a series of positive comments in 2013 which hinted at the scale of the Iara discovery, including:

Q1 2013 results call (CEO Chris Finlayson)

“An opportunity to get a degree of my excitement over what's going on over at Iara out into a more public domain. We've always been very optimistic about Iara, it is a huge resource, it has a scope close to that of Lula, but to my mind has always been very much neglected and undervalued in the market.

“We're drilling one well at the moment which is coming in with better than expected drilling results, so that's good news. And we have two more appraisal wells coming up next year, one in an un-appraised area of the field and then the second well, Iara 6, which will be a high angle, extended well test where we'll do acid fracking to test whether we can, as we believe we can, get similar production rates from Iara, as we see in the other fields in the pre-salt, in the Santos Basin.”

Q2 2013 results call (CEO Chris Finlayson)

“The latest appraisal well on Iara has been drilled and tested, with excellent results. It demonstrated delivery characteristics which are very significantly better than the first Iara discovery well. And these results are very positive for potential recoverable reserves and resources from this giant field, which, I remind you, has oil in place similar to Lula.

“Turning to Iara, I'm very excited by the results of Iara 4. To give you a bit more color to that, we flowed the well at up to 7000 barrels a day, constrained by the tubing, and we got productivity results which are very much in line with the best results we've seen in the Santos Basin. So, significantly better than were seen in the first well.”

Exploration update, September 2013 (EVP Exploration Malcolm Brown)

“The reservoir quality has been variable, unlike Lula, where it's almost uniformly good. But remember, Iara has oil in place very similar to Lula. The Iara 4 well flowed at 7000 barrels a day constrained by testing equipment. The Productivity Index of this well was equivalent to the best results we have seen in the Santos Basin, so significantly better than previous wells. We’re currently drilling a high-angle well on Iara, a technology we have employed successfully elsewhere in carbonates that can lead to improved productivity and overall recoverability.

“If you think back to the slides we showed in the Strategy Presentation, of the initial 15 FPSOs in the Operator's plans, only two were allocated to Iara. I expect that to be increased, particularly if we have more results like Iara 4.”

Q3 2013 results call (CEO Chris Finlayson)

“[We] received approval from the regulator, the A&P to submit a Declaration of Commerciality for the [job] Iara discovery in December next year. This will allow for further appraisal and well testing of the discovery, to optimize development plans. Importantly, first oil from Iara remains 2017 as planned.”

Image courtesy of BG Group.

Adapted from press release by Katie Woodward

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