Petrobras America Inc., a subsidiary of the Brazil's Petrobras, Thursday won final approval to begin oil and natural gas production off the coast of Louisiana using a floating production storage offloading (FPSO) facility. This is the first time that this technology will be used in the Gulf of Mexico (GOM), said the Bureau of Ocean Energy Management, Regulation and Enforcement (BOEM), which approved the permit and operating plan for the project.

Houston-based Petrobras America plans to use the FPSO technology at its Cascade-Chinook oil and gas project in the Walker Ridge area of the GOM, approximately 165 miles offshore Louisiana in 8,200 feet of water. Production from the facilities is expected to begin in the near future, according to BOEM. Petrobras won approval from the predecessor Minerals Management Service to develop an FPSO for use in the Gulf in 2008 (see Daily GPI, April 30, 2008).

The FPSO has a production capacity of 80,000 b/d of oil and 16 MMcf/d of natural gas, the Interior Department agency said. The floating facility has the capability to process oil and gas, store the crude oil in tanks in the facility's hull, and offload the crude to shuttle tanks for transportation to shore. Natural gas processed by the facilities would be transported to shore by pipeline.

Petrobras' FPSO will be equipped with a turret-buoy system that will allow for disconnection. In the event of a hurricane or tropical storm, BOEM said the facility would be able to disconnect from the turret-buoy and move off location until the storm has passed.

In preparation for the first use of an FPSO in the GOM, Interior and the U.S. Coast Guard worked out a memorandum of agreement in February 2008 identifying and clarifying their responsibilities. Interior's BOEM regulates oil and gas activities, such as exploration, drilling, well completion, development, production, pipeline transportation, storage, well servicing and workover activities.

The Coast Guard will regulate the offshore facilities, such as mobile offshore drilling units and vessels engaged in oil and gas activities, including offshore supply vessels, according to BOEM.

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