Libra Model and Narrative Report

This page contains the Libra Project Fiscal Model, the accompanying narrative report, and a shortform presentation. It is the first of 10 such models OpenOil will be publishing in the next few weeks.

Brazil’s Libra project is an offshore oilfield that could produce 1.3 million BOPD. But the consortium signed the PSC expecting higher oil prices. With current oil prices ($50 a barrel in Oct. 2016), Libra is unviable unless costs can be reduced significantly, and/or the fiscal regime is renegotiated – particularly the royalty. The project schedule has already slipped – which we think reflects theses challenges – and it may slip further. We will keep a look out for fiscal regime renegotiation…

The main findings of OpenOil’s model and analysis are:

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Click the file to download the narrative report.

● In middle scenario pre-tax IRR is 18.4%, after-tax IRR is 7.0%, and NPV8 is negative at current oil prices ($50 per barrel, October 2016)

● Breakeven is at around $54 a barrel for the middle scenario (production of 10 billion barrels)

● At low oil prices the royalty is highly regressive

● Capex would need to be cut to achieve profitability

● Given all of the above, the project will likely need to have terms and schedule revised

For media inquiries:
Johnny West, Director, johnny.west@openoil.net
Olumide Abimbola, Head of R&D, olumide.abimbola@openoil.net

Libra Project Fiscal Model

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Click on the chart to download a copy of the full model for your own use, under CC-BY-SA 4.0 license.

Supporting documents:

Interview with the modelers

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