Mero Revolutions: countering CO2 in pre-salt Brazil?

The super-giant Mero field in pre-salt Brazil is not like its predecessors. While prolific, it has a 2x higher gas cut, of which c45% is corrosive and environmentally unpalatable CO2. Hence, Petrobras, Shell, TOTAL and two Chinese Majors are pushing the boundaries of deepwater technology. Our new, 16-page note assess four innovation areas, which could unlock $2bn of NPV upside. But the distribution of outcomes remains broad. $4bn is at risk if the CO2-challenges are not overcome.


Page 2 provides background on pre-salt Brazil, especially the flagship Lula project, which a new super-giant, Mero, is trying to emulate.

Page 3-4 contrast Mero to Lula, based on data from flow-tests. Mero has a 2x higher gas-cut and c8x higher CO2.

Page 5 reviews Petrobras’s own internal concerns over CO2-handling at Mero, and how they are expected to sway the decline rates at the field.

Page 6 outlines our valuation of the Mero oilfield, testing different CO2-handling scenarios. Our full model is also available.

Pages 7-8 review Mero’s FPSO design adaptations, to handle the field’s higher gas and CO2. These will be 2-2.5x larger FPSOs than Lula, by tonnage.

Pages 8-10 illustrate pipeline bottlenecks facing pre-salt Brazil. After considering alternative options (re-injection, LNG), we argue more pipelines may be needed.

Pages 10-12 describe riser innovations, which may help handle the risks of CO2-corrosion at Mero. One option is overly complex. The other is more promising.

Pages 12-16 cover the holy grail for Mero’s CO2, which is subsea CO2 separation. This would be a major industry advance, and unlock further billion-barrel resource opportunities. Upcoming hurdles and challenges are assessed.

Pages 15-16, in particular, cover Shell’s industry-leading deepwater technology, which may be helpful in maximising value from the resource, longer-term.

New Risers for pre-salt Brazil?

Petrobras has patented next-generation riser designs, to handle sour-service crude from pre-salt Brazil. This is needed after prior cases of riser-failure, e.g., at Lula. Its new solution could also support development of higher-CO2 fields, such as Libra. But complexity is an order of magnitude higher. A simpler alternative is the growing potential from thermo-plastic composite pipe, which resists corrosion and is 45% more economical than conventional risers.

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Can Technology Revive Offshore Oil?

The appetite to invest in new offshore oil projects has been languishing, due to fears over the energy transition, a preference for share-buybacks, and intensifying competition from short-cycle shale. So can technology revive offshore and deep-water? This note outlines our ‘top twenty’ opportunities. They can double deep-water NPVs, add c4-5% to IRRs and improve oil price break-evens by $15-20/bbl.


Pages 9-18 of the note outline each of our ‘top twenty’ focus areas, after reviewing 1,500 patents and 300 technologies across the industry. In each case, we outline which companies are most advanced.

Our work shows it is essential to invest with – or have your resources managed by – technology leaders. The industry must also keep improving, to re-excite investment.