Illustration of the Bacalhau field phase 1 development. Credit: Equinor ASA.

Norway’s Equinor and ExxonMobil have agreed to move ahead with the second development phase of the Bacalhau field offshore Brazil, reported Reuters, citing the Norwegian oil producer.

Located across two licences, BM-S-8 and Norte de Carcará, the Bacalhau field is expected to produce first oil in 2024.

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The Phase 1 development of the field will include 19 subsea wells tied back to a floating production, storage, and offloading (FPSO) unit.

This FPSO will have a production capacity of 220,000 barrels per day and a storage capacity of two million barrels.

With the second expansion phase, Equinor and ExxonMobil intend to increase the field’s production capacity with potentially double the investment, subject to successful new exploration work, two people close to discussions said.

The partners are considering a second drilling rig, a second floating production platform, and a gas pipeline for the next phase of the project, according to three people close to the discussions.

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In 2023, the partners plan to drill a new appraisal well in the north of the Bacalhau field “to better understand the reserves base for the Phase 2 development”, Equinor told the news agency.

A contract for a second drilling rig is also being assessed by the project partners.

A spokesperson told Reuters: “Bacalhau is a globally competitive project with a break even below $35 in a key energy region.”

The pre-drilling of Phase 1 wells is planned to start in the third quarter of 2022.

Equinor operates the field with a 40% stake. Other partners include ExxonMobil, Petrogal Brasil, and Pré-sal Petróleo.

Earlier this month, Equinor announced that it had agreed to sell its stakes in two oil and gas fields in the Norwegian North Sea.