Norwegian oil and gas company Statoil ASA (STO - Analyst Report), in its effort to maximise yield, has significantly enhanced oil recovery at its Peregrino field through the use of new technology.
Statoil has spud 15 production wells and completed its first multi lateral well offshore Brazil through the application of advanced horizontal well technology. The company currently estimates augmented production volumes from the field to be in the range of 300 million to 600 million barrels.
Statoil stated that the recovery rate at the field has increased twofold to 20%, after it received development consent, from around 10% since it acquired a stake. The field was projected to have recoverable reserves of 2.3 billion barrels.
The factors facilitating increased recovery at Peregrino are a high degree of reservoir exposure, the spudding of long horizontal wells using geosteering technology to maximize length and optimize placement, and water injection.
Located about 85 kilometers off the Brazilian coast, in a water depth of about 100 meters in the Campos basin, the Peregrino field came on line in April 2011. The Peregrino field is operated by Statoil and comprises two drilling and wellhead platforms as well as a huge floating production, storage and offloading unit (FPSO).
Statoil has a 60% stake in the field licenses BM-C-7 and BM-C-47 while its partner Sinochem holds the remaining 40%.
Statoil is one of the largest international operators in Brazil. In February 2012, it made a high-impact Pao de Acucar discovery in BM-C-33, along with its partner – state-owned Petroleo Brasileiro SA
(PBR - Analyst Report
) and Pepsol Sinopec, the operator. The company holds a key position as a long-term operator.
Statoil holds a Zacks #3 Rank, which is equivalent to a Hold rating for a period of one to three months. Longer term, we maintain our Neutral recommendation on the stock.