June 21 (UPI) -- New policies enacted by Brazilian energy regulators facilitate construction of the production infrastructure needed to crack into offshore oil, a report found.
A compromise solution from the National Agency of Petroleum reduced fines for non-compliance and made it easier for companies to meet exploration and production contract requirements. Consultant group Wood Mackenzie said that means it becomes easier to crack open 21 million barrels of production from offshore Brazil by the middle of the next decade.
"Brazil's new local content policy debottlenecks floating production, storage and offloading vessel construction by allowing operators to construct hulls in Asian shipyards and use Brazilian suppliers to build and integrate selected modules," Juliana Miguez, a senior research analyst for Latin America, said in the report emailed to UPI.
Much of the oil from the offshore basins is buried underneath a thick layer of salt on the ocean floor and producers have been able to crack into that in recent years. Operators have used FPSOs to help tap the pre-salt oil offshore.
In a report from earlier this month, Miguez said the high costs of getting into pre-salt basins, as well as the high risk involved, offsets some of the value from Brazil's resource potential.
Nevertheless, under the new rules, Wood Mackenzie estimated that Brazil could sustain a production capacity of about 5 million barrels of oil per day by the middle of the next decade, compared with an expected plateau of around 3.7 million barrels per day under the previous mechanisms.
All 36 of the FPSOs necessary for the development of resource already discovered offshore Brazil could be in service by 2027, compared with about 25 under the old rules.
French supermajor Total started production at the Libra field off the coast of Brazil last year. Using a FPSO, Total said early capacity from Libra is around 50,000 barrels per day.