Cnooc Limited (hereinafter referred to as CNOOC, 00883.HK; NYSE:CEO; TSX:CNU) announced in November 27th that the Libra oilfield block located in the southeastern waters of Brazil has started production.

The Libra area is about 180 kilometers away from the coast of Rio De Janeiro, with an area of more than 1500 square kilometers.

The expected reserves of oil are equivalent to 80% of the total proven crude oil reserves in Brazil, which is one of the largest offshore oil fields in the world. According to the prediction issued by Brazil Petroleum Administration, the area has 12 billion barrels of recoverable crude oil reserves, and the highest output after development can reach 1 million 400 thousand barrels per day.

In the Libra consortium, Brazil's national oil company will be the operator and holds 40% of the equity, with Shell 20%, Total 20%, PetroChina and CNOOC 10% of the equity. In 2013, the government of Brazil for the first round of salt layer oil mining rights bidding, a consortium of Brazil's national oil company, Shell, Total and two oil companies of china is the only bidder bid to block Libra, and was valid for a period of 35 years of mining right.

The block uses Pioneiro DE Libra FPSO production and extends the test train. The purpose is to assess the dynamic characteristics of reservoir, and to deepen the understanding of reservoir sedimentary characteristics. Daily processing capacity of Pioneiro DE Libra can reach 50000 barrels of oil and 4 million cubic meters of associated gas.

The recoverable reserves of oil of Brazil's deep sea salt fields is extremely rich, so recent years the international oil giants have been betting oil assets in Brazil's deep sea salt fields. This year in October 27th, Brazil Petroleum Administration Bureau (ANP) organized and completed on the country's sea salt fields second and third rounds of production sharing contracts. In the 8 deep-sea sub salt oilfield blocks, 6 blocks were successfully bid by 11 oil companies or their competitive bidding consortium, and 2 blocks were used for bidding. The three major companies of Sinopec, CNPC and CNOOC all got something in Pakistan.