Japan steps into offshore Brazil bonanza

Jan. 9 (UPI) -- A consortium of Japanese energy companies said Tuesday they agreed to invest in a long-term agreement involving floating production options for offshore Brazil.

Japanese energy company Marubeni said it teamed up with floating production contractor MODEC Inc., and Japanese transport company Mitsui O.S.K. Lines to invest in a long-term charter business "for the purpose of providing a floating production, storage and offloading system for use in the Sepia area offshore Brazil."

Much of the oil from the offshore basins are buried underneath a thick layer of salt on the ocean floor and producers have been able to crack into that in recent years. Output from pre-salt basins has accelerated since 2009 as exploration and production technology acclimates to the region's tough conditions.

By the end of August, Brazil had already produced an average of 3.3 million barrels per day in oil and other petroleum liquids. That's up from the full-year 2016 average of 3.2 million barrels per day.

Brazil ranks second behind Venezuela in terms of proven oil reserves in South America. Libra alone holds between 8 billion and 12 billion barrels of recoverable reserves.

French supermajor Total started production at the Libra field off the coast of Brazil last year. Using a floating production, storage and offloading vessel, Total said early capacity from Libra is around 50,000 barrels per day.

In December, Norwegian energy major Statoil said it would spend at least $2 billion to triple its production capacity from offshore Brazil.

The Japanese consortium said its FPSO would be chartered for 21 years. No terms of the investment were unveiled.