Brazil’s state-owned oil company Petrobras claimed on Monday that its recent offshore find may be the biggest in three decades. The news did not ease tensions on commodity markets, where crude Brent topped $110 for the first time.
RIO DE JANEIRO – An offshore find by Brazilian state oil company Petrobras in partnership with BG Group and Repsol-YPF may be the world’s biggest discovery in 30 years, the head of the National Petroleum Agency said on Monday.
Haroldo Lima told reporters the find, known as Carioca, could contain 33 billion barrels of oil equivalent, five times the recent giant Tupi discovery. That would further boost Brazil’s prospects as an important world oil province and the source of new crude in the Americas.
Shares in Petrobras, which said studies on the find continued and would not comment on the figure, soared on the news. They were trading 5.7 percent higher at 83 reais in the late afternoon, after retreating somewhat from gains of more than 7 percent.
“It could be the world’s biggest discovery in the past 30 years, and the world’s third-biggest currently active field,” Lima, head of the government’s oil and fuel market regulator, told reporters at an industry event in Rio de Janeiro.
He would not say whether the preliminary reserve estimate was recoverable or in-place. Recoverable reserves can constitute less than a third of in-place reserves.
Last year Petrobras put Tupi’s recoverable reserves at between 5 billion and 8 billion barrels of oil equivalent, most of it light oil.
Lima said his data came from Petrobras at an informal level.
Petrobras tested one well at Carioca last year and is still drilling another. The company made the Tupi recoverable reserve estimate based on tests from two wells.
Petrobras said in a statement the second well had not yet reached the subsalt level and “more conclusive data on the potential of the block will be known after the evaluation process is finished.”
FIND COULD BE ‘REALLY HUGE’
Analysts said the estimate was probably still very preliminary, although it did not contrast with some geologists’ forecasts made in the past.
“It’s a very relevant number, basically triples the reserves. But it still seems a little premature to have a precise number while they are drilling a second well,” said Felipe Cunha, an analyst with Brascan bank in Rio de Janeiro.
The Carioca area lies west of Tupi in the prolific Santos basin, off the coast of Sao Paulo state. BG has a 30 percent stake in the project and Repsol 25 percent.
“It’s subsalt, and we knew there were big expectations for the subsalt cluster in addition to Tupi. But, if this is confirmed, it’s really huge,” said Sophie Aldebert, associate director with Cambridge Energy Research Association in Brazil.
“With that size, you’d have plenty of gains of scale that could easily offset the subsalt geological challenges,” she added. The challenges include shifting salt clusters that require reinforced piping and producing in deep waters from huge depths under the ocean floor.
Geologists had long voiced the theory that Tupi could have an even bigger neighbor containing light oil or natural gas. If the reserves are confirmed, Brazil could jump into the top 10 oil countries by reserves, surpassing nations like Nigeria.
Petrobras also has said previously it sees good prospects for major oil finds in the subsalt areas in the Campos and Espirito Santo basins north of Santos, but it is focusing mainly on Santos at the moment.
Most of Petrobras crude comes from heavy-oil Campos basin fields, but recent subsalt discoveries could make Brazil a major producer of higher quality oil.
The company expects to start an extended production test at Tupi early next year and then crank up a 100,000 barrels per day pilot project there in late 2010 or early 2011. Analysts say, however, the costly subsalt development can take more time than Petrobras expects.
5 responses so far ↓
wil // April 16, 2008 at 4:57 pm
Just seems coincidental to me with oil/gold/dollar being the way they are–these big finds in North Dakota and Brazil being conveniently announced.
pjwalker911 // April 17, 2008 at 2:13 am
The point is, Peak Oil, like Global Warming, is just another elite artificial scarcity scam to drive up the price of energy, food and all the rest to further enslave the masses.
The fact is, we can crack all the hydrogen we want out of water with simple technology and the only “pollutants” will be oxygen and water vapor. But Big Oil wouldn’t want that would they? Unless of course, they could own the Earth’s water supplies, or even put a patent on H2O.
wil // April 17, 2008 at 2:28 am
Was it Monsanto trying to patent natural, non modified plants?
pjwalker911 // April 17, 2008 at 4:24 am
I seem to recall they were trying to do something like that. I believe they have stockpiled a large number of indigenous heirloom seed varieties. After all, the elite don’t eat the GM frankinfood crap. They have their own organic farms for chrissake and only eat the finest natural foods. Even the Monsanto cafeterias don’t serve GMOs because the scientists who make the shit know it’s bad for them. Anyone paying attention?
Not many.
PaulHunt // June 10, 2008 at 1:50 pm
Brazil is either very smart or very lucky to have found this oil now. While I look at the oil crisis as a double edged sword, good because its forcing us to conserve and innovate new technologies but bad because these high prices are really ravaging people with low incomes, I think that America should be drilling for oil off our coasts. While it will be an eye sore and probably not too great for the ocean it might be able to alleviate some of the pain until we find the alternative energies we can use safely, cleanly, cheaply, and cost efficient. This article I read, called Brazilian Oil Discovery — New Offshore Drilling Needed In U.S., gives some great reasons for why it would be a good idea to at least scout out our coasts to know if we have oil to drill just in cast oil prices really get out of control. Plus I would imagine its much cleaner than coal to liquid conversion I’ve been reading a lot about lately.