Petrobras poised to launch biggest project ever in US GOM

A senior official with Brazil’s state-owned has announced that the company remains on track to launch its biggest project ever in the U.S. in coming months. Petrobras, keeping with its original timeline, is set to begin producing oil by mid-2010 from two ultra -deepwater fields in the Gulf of Mexico known as Cascade and Chinook, said Cesar Palagi, a Gulf of Mexico asset manager for the company.

The Petrobras project is being closely watched because it will be among the first to come on-stream in the emerging Lower Tertiary play, an ancient rock layer under the Gulf of Mexico some 150 miles offshore from Louisiana and Alabama, where the industry has made huge oil discoveries in recent years.

It's likely to follow only Shell's multibillion-dollar Perdido project -- capable of 100,000 barrels per day of oil and 200 million cubic feet per day of natural gas -- which is slated to start production early this year.
For the project, Petrobras also has secured the first U.S. license to use a Floating Production, Storage and Offloading vessel, or FPSO, to operate in the Gulf of Mexico. The vessel, currently en route to the Gulf from Singapore, has the capacity to produce 80,000 barrels per day of oil, a mark Palagi said the project could hit within two years.

In January, Petrobras exercised an option to acquire the remaining 50 percent of the Cascade field held by Oklahoma City-based Devon Energy Corp. The move came after Devon said last year it would sell its international and Gulf of Mexico assets to reduce debt and refocus on North American onshore gas fields. In Chinook, Petrobras has a 66.7 percent stake, while France's Total holds the remaining 33.3 percent.

Petrobras is operator of both fields and plans to develop them jointly.