Oil Production for Brazil's OGX off Target
Brazilian oil firm OGX, an EBX Group company, could face significant challenges in securing future investments and partnerships in the country, after its operations in the Tubarao Azul field yielded less-than-expected production rates, says an analyst with GlobalData.
According to Adrian Lara, GlobalData’s lead analyst covering Upstream Oil and Gas, OGX significantly overestimated the production rates for the carbonate reservoirs associated with Tubarao Azul, which is located in the Campos Basin, where a significant proportion of Brazil’s national oil is produced.
While OGX initially anticipated a production rate for the Tubarao Azul field in the range of 10,000 barrels per day to 20,000 barrels per day, two of its wells stabilized at just 5,000 barrels per day and a third well began production at less than 2,000 barrels per day.
Lara says: “This shows that the complexity of the reserves was greatly underestimated by OGX, which was subsequently forced to lower its production level to meet with reservoir management best practice.
“Furthermore, due to OGX’s haste to begin production, a pilot phase – a best practice approach for offshore Brazilian fields which even an experienced company, such as Petrobras, would normally conduct – was not implemented. The company simply based a development plan around initial well tests, which failed to reveal the full complexity of the reservoirs.”
Despite the disappointing output from this project, OGX has recently announced a new partnership with Malaysian oil company Petronas for the future development of the Tubarao Martelo field.
However, Lara concludes: “Considering the execution of the Tubarao Azul and associated recent events, it is crucial that OGX’s current development plans are met with resounding success, or else the company may well experience serious difficulties when it comes to securing new partnerships.”
Hydrostor receives $4m funding for A-CAES facility in Canada
Hydrostor has received $4m funding to develop a 300-500MW Advanced Compressed Air Energy Storage (A-CAES) facility in Canada.
The funding will be used to complete essential engineering and planning, and enable Hydrostor to plan construction.
The project will be modeled on Hydrostor’s commercially operating Goderich storage facility, providing up to 12 hours of energy storage.
Hydrostor’s A-CAES system supports Canada’s green economic transition by designing, building, and operating emissions-free energy storage facilities, and employing people, suppliers, and technologies from the oil and gas sector.
The Honorable Seamus O’Regan, Jr. Minister of Natural Resources, said: “Investing in clean technology will lower emissions and increase our competitiveness. This is how we get to net zero by 2050.”
A-CAES has the potential to lower greenhouse gas emissions by enabling the transition to a cleaner and more flexible electricity grid. Specifically, the low-impact and cost-effective technology will reduce the use of fossil fuels and will provide reliable and bankable energy storage solutions for utilities and regulators, while integrating renewable energy for sustainable growth.
Curtis VanWalleghem, Hydrostor’s Chief Executive Officer, said: “We are grateful for the federal government’s support of our long duration energy storage solution that is critical to enabling the clean energy transition. This made-in-Canada solution, with the support of NRCan and Sustainable Development Technology Canada, is ready to be widely deployed within Canada and globally to lower electricity rates and decarbonize the electricity sector."
The Rosamond A-CAES 500MW Project is under advanced development and targeting a 2024 launch. It is designed to turn California’s growing solar and wind resources into on-demand peak capacity while allowing for closure of fossil fuel generating stations.
Hydrostor closed US$37 million (C$49 million) in growth financing in September 2019.