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Apr-15-2008Petrobras Reports Major Offshore Oil Find(topic overview)
CONTENTS:
- SAO PAULO, Brazil (AP) — A deep-water exploration area could contain as much as 33 billion barrels of oil, an amount that would nearly triple Brazil's reserves and make the offshore bloc the world's third-largest known oil reserve, a top energy official said Monday. (More...)
- Brazil holds an estimated 12 billion barrels of crude reserves, South America's second-largest deposit behind Venezuela, according to London-based BP Plc. (More...)
- Hess, which is a partner in efforts to find and tap subsea reserves adjacent to Carioca, closed 9.1 higher at $101.19 in New York. (More...)
- State-run oil firm Petróleo Brasileiro SA, or Petrobras, said Monday that it needed more data to evaluate the size of the latest discovery. (More...)
- Environmental Capital collects and analyzes news in everything from oil to gas, from ethanol to wind power. (More...)
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SAO PAULO, Brazil (AP) — A deep-water exploration area could contain as much as 33 billion barrels of oil, an amount that would nearly triple Brazil's reserves and make the offshore bloc the world's third-largest known oil reserve, a top energy official said Monday. National Petroleum Agency President Haroldo Lima cautioned that his information on the field off the coast of Rio de Janeiro is unofficial and needs to be confirmed — but his comments sent shares of state-run oil company Petrobras soaring in New York and Sao Paulo. [1] The head of Brazil's National Petroleum Agency, Haroldo Lima, said yesterday that the find in the Carioca exploration area could contain 33 billion barrels of oil equivalent, which would make it the largest discovery in three decades and the world's third-largest active field, Reuters news service reported from Rio de Janiero. Mr. Lima did not say whether his unofficial estimate was of recoverable reserves or in-place resource, and Petrobras, officially Petroleo Brasileiro SA, itself had no comment. "This is one of the most impressive oil finds globally in terms of scale," said David Riedel of New York-based Riedel Research Inc., who visited Petrobras late last year.[2] 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. "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. Lima said he obtained the data from Petrobras at an informal level. The National Petroleum Agency distanced itself from Lima's remarks, saying in a statement that they were "unofficial" and simply repeated information already in the public domain.[3]
RIO DE JANEIRO (AFP) — Brazil has discovered a new offshore oil field that could prove to be "the third biggest field in the world," the head of the country's National Oil Agency, Haroldo Lima, said Monday. The find, located off the southwest coast near another field called Tupi whose immense reserves were announced in November, is calculated to hold 33 billion barrels of oil, he said. "It could be the biggest discovery in the last 30 years," Lima told a conference, according to Brazilian media. "But nothing is confirmed," he cautioned, explaining his information was "unofficial." Petrobras issued a note after its shares rose 7.67 percent on the news, saying it was too early to say how much oil the field might contain.[4] The Pao de Acuca field could reportedly contain as much as five times the oil reserves as a nearby field, Tupi, which reportedly contains about eight billion barrels. "If this were to be confirmed, it would be the biggest discovery ever made in the world," Haroldo Lima, head of Brazil's National Petroleum Agency, was quoted as saying. He was apparently waxing enthusiastic, as a spokesperson later clarified his remarks to say Mr. Lima was commenting on reports. Merrill Lynch analysts were still effusive in their praise. "We think this is part of a major transformation of Petrobras, which could lead it to becoming a much larger company in terms of production and reserves over the next 5-10 years," they wrote.[5] The Pao de Acucar field could contain up to 5 times as much oil reserves as the nearby Tupi field, the Estado news agency said, citing Haroldo Lima, the head of Brazil's National Petroleum Agency. "If this were to be confirmed, it would be the biggest discovery ever made in the world," Lima is quoted as saying. This region has been a thorn in PBR's side for the past several months, as the stock has only closed 4 sessions above 120 ever.[6]
Analysts said the magnitude of the find, if confirmed, could have far-reaching global energy ramifications. "This would lay to rest some of the peak oil pronouncements that we were out of oil, that we weren't going to find any more and that we have to change our way of life," said Roger Read, an energy analyst and managing director at New York-based investment bank Natixis Bleichroeder Inc., which buys and sells stock in offshore drilling contractor Seadrill, a Petrobras contractor. Lima told reporters that Petrobras "may have discovered a huge petroleum field that could contain reserves large as 33 billion barrels," amounting to the world's third-largest reserve, according to his spokesman, Luiz Fernando Manso. His agency later issued a statement saying the comments were based on a recent report in World Oil magazine and a report last November from Brazil's Agencia Estado news agency. Brazilian Planning Minister Paulo Bernardo declined later Monday to discuss the discovery, saying, "It's better to wait for official confirmation." Lima's agency regulates Brazil's oil industry, and his initial comments appeared to represent confirmation of what experts have long suspected: That extremely deep exploration areas hundreds of miles off the nation's coast may hold potentially huge reserves.[1] The ANP said Monday night in a release that Lima's statements earlier in the day had been unofficial comments, and that the information was already public knowledge. It had been published in the February edition of the World Oil magazine, the ANP said. World Oil Magazine said on its Web site in February that if reports on the field prove correct, the new oil find "would be the third-largest field in the world." World Oil in its report referred to a report made in December on the Web site Next Energy News. That report said that "preliminary exploration" of the area has determined that the new field "is five times the size of the Tupi field," and that according to officials at Petrobras, the field "may produce up to 40 billion barrels of oil."[7]
"You're talking about a reserve the size of total U.S. reserves," said Tim Evans, an analyst with Citigroup Inc. in New York. "It's a big, big number." If proven, the oil in the exploration area called both Carioca and Sugarloaf Mountain by analysts would also be five times larger than the Tupi oil field, whose estimated reserves of 8 billion barrels were announced by Petroleo Brasileiro SA in November.[1] April 14 (Bloomberg) -- Petroleo Brasileiro SA's BM-S-9 block, known as Carioca, may hold 33 billion barrels of oil equivalent, up to five times the size of the company's Tupi oil field, Folha de S. Paulo reported, citing Haroldo Lima, director of Brazil's National Oil Agency.[8] Petroleo Brasileiro's American depository shares were recently up $8.41 to $121.26 on composite trading on the New York Stock Exchange, and hit a high of $125.29 during intraday trading. The discovery was made at its BM-S-9 block, known as Carioca, and may hold as much as 33 billion barrels of oil. Haroldo Lima, the director of the agency, cautioned that his information on the field off the coast of Rio de Janeiro was unofficial and still needed to be confirmed.[9]
Rio de Janeiro ' The director general at the National Petroleum, Natural Gas and Biofuel Agency (ANP), Haroldo Lima, announced today (14th) that the Brazilian oil company Petrobras discovered a "mega field" of oil and gas at the Santos Basin, in the southeastern Brazilian Coast. "It is the largest discovery in the oil market in the last 30 years, and this field, named Carioca, might be the third largest in the world," said Haroldo Lima.[10] RIO DE JANEIRO, April 14 (Reuters) - Head of Brazil's National Petroleum Agency (ANP) said on Monday an offshore find by state oil company Petrobras (PETR4.SA: Quote, Profile, Research )(PBR.N: Quote, Profile, Research ) known as Carioca may contain 33 billion barrels of oil equivalent.[11] RIO DE JANEIRO, April 14 (Reuters) - An offshore find by Brazilian state oil company Petrobras (PETR4.SA: Quote, Profile, Research )(PBR.N: Quote, Profile, Research ) in partnership with BG Group (BG.L: Quote, Profile, Research ) and Repsol-YPF (REP.MC: Quote, Profile, Research ) may be the world's biggest discovery in 30 years, the head of Brazil's National Petroleum Agency said on Monday.[3]
An offshore find by Brazil's state-run oil firm Petroleo Brasileiro SA, or Petrobras, in the Atlantic ocean may be the largest oil discovery in the past 30 years, the head of the Brazil's National Petroleum Agency said on Monday.[9]
The head of Brazil's National Petroleum Agency said Petrobras has discovered a monster offshore field that could contain 33 billion barrels of oil. It would be the largest discovery in decades.[12] Earlier Monday, Haroldo Lima, the head of Brazil's National Petroleum Agency, or ANP, said that according to unconfirmed and unofficial reports he read, the new discovery could contain up to 33 billion barrels in oil equivalent, or BOE, an ANP press official said.[7] A deepwater exploration area off Brazil's coast could hold as much as 33 billion barrels of oil, making it the world's third-largest reserve and the largest discovery in decades, according to the head of the country's National Petroleum Agency.[13] SAO PAULO, Brazil (AP) — The head of Brazil's National Petroleum Agency says a deep-water exploration area in the Atlantic Ocean could contain as much as 33 billion barrels of oil.[14]
If the report is confirmed as true, the oil in the Carioca exploration area would be five times larger than the recent giant Tupi discovery in Brazil, whose estimated reserves of 8 billion barrels were announced by Petroleo Brasileiro SA in November.[9] The Tupi find has already been hailed as having the potential to propel Brazil into the same league as OPEC nations, with estimated reserves of up to eight billion barrels of oil. The new discovery -- known in Brazil as the Carioca site, and abroad as the Pan de Azucar (or Sugarloaf) site -- "could have reserves five times bigger than those of Tupi," Lima said.[4]
According to Lima, the Carioca field is located near the Tupi field discovered last year. He stated that the new field contains reserves estimated at 33 billion barrels of oil equivalent (petroleum and petroleum gases), whereas the Tupi field contains reserves estimated to be between 5 million and 8 billion barrels.[10] Analysts have estimated it could cost $50-billion (U.S.) to develop the Tupi field to full production. If confirmed, the Carioca field would vault Brazil into the Top 10 ranks of countries for oil reserves, ahead of Organization of Petroleum Exporting Countries such as Nigeria and Libya. It would also surpass the United States, which has 20 billion barrels of proved reserves. (Canada has the world's second-largest reserve base at 179 billion barrels, most of which is oil sands.) It will take decades for Brazil to develop Tupi and Carioca, but the country could eventually pump out as much as three million barrels of crude a day - higher than Venezuela's current output.[2]
John Parry of John S. Herold Inc. in Norwalk, Conn., said Brazil has maintained a disciplined approach to Petrobras, which is considered among the world's best state-owned oil companies, with an excellent reputation for deep-water drilling and operational efficiency. Mr. Parry said development costs could be $6 to $7 a barrel of oil equivalent to develop the Tupi field, adding it's too soon to make similar estimates for Carioca. At $7 a barrel of oil equivalent, the development costs are "quite cheap in today's market," he said.[2]
Petrobras in November said Tupi could contain up to 8 billion barrels of oil equivalent. Later Monday, Brazil Energy Minister Edison Lobao was quoted as saying on the Estado newswire that he would neither confirm nor deny Lima's statements. He cautioned that any announcement on the extension of oil fields should only be made once the government is certain about the data.[7] Petrobras last year put Tupis recoverable reserves at between five billion and eight billion barrels of oil equivalent, most of it light oil. "Its subsalt, and we knew there were big expectations for the subsalt cluster in addition to Tupi," said Sophie Aldebert, associate director with Cambridge Energy Research in Brazil. "But if this is confirmed, its really huge."[15]
In a seminar at the Getulio Vargas Foundation in Rio, Lima stressed that the information has not been released "officially" yet. He added that, if confirmed, the field, with an estimated volume of 33 billion barrels, in the deep waters of the Santos Basin, in southeastern Brazil, would be the world's biggest oil and gas discovery of the past 30 years.[16] The oil field in the Santos Basin in southeastern Brazil appears to be the world's third-largest oil and gas reserve, bearing an estimated volume of 33 billion barrels, Lima said.[17]
Petrobras also announced a blockbuster find of natural gas in February in an Atlantic Ocean field nicknamed Jupiter. "More conclusive data about the potential of the discovery will only be known after the conclusion of the other phases of the evaluation process, and the market will be informed at the opportune moment," Petrobras said in its statement to Brazilian securities regulators after Lima made the comments. While the potential Brazil find could add significant supplies to a global oil market many see as tight, it would likely take the better part of a decade before any of the oil finds its way to market. Evans said it's impossible to say whether more 33-billion-barrel oil fields exist under the sea.[1] RIO DE JANEIRO, April 14 (Xinhua) -- Brazil's state-owned oil company Petrobras denied Monday an earlier announcement of the discovery of a gigantic oil and gas field in southeastern Brazil.[17] RIO DE JANEIRO, April 14 (Xinhua) -- Brazil's state-owned Petrobras, BG Group and Repsol have discovered what could be the world's third-largest oil and gas reserves, Haroldo Lima, director of the National Oil and Gas Agency (ANP), which regulates the sector in the country, said on Monday.[16] RIO DE JANEIRO, Brazil ''' A new field, Sugar Loaf in block BM-S-9 may contain up to 33 Bboe, Haroldo Lima, head of Brazil's National Petroleum Agency, said today.[18] Haroldo Lima, director of Brazil's National Oil Agency, disclosed the 33 billion-barrel estimate at a seminar in Rio de Janeiro and said no official information is available yet.[19]
If true, that would make the field one of the largest oil reserves in the world - and the largest find in decades. Haroldo Lima, the director of the agency, cautioned that his information on the field off the coast of Rio de Janeiro was unofficial and still needed to be confirmed.[15]
Haroldo Lima, head of Brazil's National Oil Agency, estimates that Carioca might be as much as five times the size of Tupi. Why the spate of discoveries off Brazil? Simple: With oil topping $100 a barrel, it's now more economical to prospect for hard-to-get supplies, whether deep in the ocean or in remote regions of dry land.[20] If it contains 33 billion barrels of oil equivalent, the discovery could be five times the recent giant Tupi discovery in Brazil, and it would further boost Brazils prospects as an important world oil province and the source of new crude in the Americas.[15] Take Brazil's Petroleo Brasileiro. This follows Brazil's discovery last December of a huge new oil source, the Tupi field, also thought to hold billions of barrels.[20]
April 14 (Bloomberg) -- Petroleo Brasileiro SA's offshore Carioca prospect may hold 33 billion barrels of oil, enough to supply every refinery in the U.S. for six years, making it the third-largest oil field ever discovered.[19] Offshore U.S. sources hold as much as 10 billion barrels of untapped oil, while the 2,000 acres of the Alaska National Wildlife Refuge have as much as 16 billion -- enough to replace 30 years of Middle East imports.[20]
The Brazilian oil company has recently announced two other major offshore discoveries, including the Tupi field, which it has said contains as much as eight billion barrels of oil equivalent.[2] Petrobras in November said Tupi could contain up to 8 billion barrels of oil equivalent, or BOE.[21]
Tupi is regarded as the largest oil and gas reserve ever found in Brazil, bearing an estimated volume of 5-8 billion barrels of light oil.[16] Brazil's current proven oil reserves are 11.8 billion barrels, according to the U.S. Energy Department.[1]
U.S. depositary receipts of Repsol SA, a partner in the field, surged as much as 21 percent to $44.85, the stock's largest daily gain. New York-based Hess Corp., which owns stakes in two nearby prospects, had its biggest intraday gain since 1981. "If all of those barrels are recoverable, that's a very significant find,'' said Dick Gibson, a geologist who's been advising oil and natural-gas producers since 1975. "That whole area off the coast of Brazil is becoming a new oil province.''[19] ANP added that the field could not be classified as an "exploitation field" because it has not been declared commercially viable. The first trace of the existence of oil and gas in the field, located in the pre-salt layer, was found in Aug. 2007, but members of the consortium have not released any prospects of its total volume so far. The new field is also close to block BMS-24, where Petrobras announced at the beginning of this year to have discovered Brazil's largest natural gas reserve, in the Jupiter field.[16] There was confusion as to the name of the new discovery. Estado, however, said he was referring to the area as the Pao de Acucar field - or Sugar Loaf in English. Both ANP and Petrobras press officials said the two names possibly mean the same oil reserve.[7] Petrobras shares jumped 6.23 percent to 83.50 reais on the news, reversing early losses. "It could be the worlds biggest discovery in the past 30 years, and the worlds third-biggest currently active field," Lima told reporters. He would not say whether the reserve estimate was recoverable or in-place.[15] The Carioca field may become Petrobras' biggest and it may "significantly'' increase the company's future production, said Eduardo Roche, a fund manager at Rio de Janeiro-based Modal Asset Management. "The potential for this field is gigantic,'' said Roche, who helps manage about 1 billion reais in bonds and stocks, including Petrobras shares, at Modal. "Petrobras is among a handful of companies that have been able to renew its reserves. Its capacity to increase future output is absurd.''[19] Additional wells must be drilled to develop a "more conclusive'' estimate, the Rio de Janeiro-based company said in an e-mailed statement. Only Saudi Arabia's Ghawar and Kuwait's Burgan fields are bigger: Ghawar holds as much as 83 billion barrels of crude, while Burgan has up to 72 billion.[19]
Evandro Pereira Dias, who worked for contractor Perbras, died Saturday in an accident at drilling platform P-17, which is anchored some 140 kilometers (87 miles) off the coast of Rio de Janeiro state in the Campos basin, where Petrobras produces more than 70 percent of Brazil's oil, the state-run energy company said.[22] Brazil's state-run Petrobras P-40 oil platform undergoes maintenance as it floats in the Guanabara Bay of Rio de Janeiro, Brazil in this Wednesday, March 21, 2001 file photo.[1]
RIO DE JANEIRO -- Brazil appears to have made its second major offshore oil strike in recent years, the latest good news for a country that could be on its way to becoming an important oil exporter.[23]
When prices soared, Brazil got busy. This is happening around the world. As we reported in December, China last year made 10 major new energy discoveries in a bid to secure its energy future. India recently invited foreign companies to help it find more energy on its territory. Europe continues to fully exploit its oil reserves in the North Sea, without worrying about hurdles such as the Kyoto Protocol on greenhouse gases or concerns about damage to the ocean ecosystem.[20] While others around the world engage in a mad dash to find more oil reserves, the U.S. seems to think $111-a-barrel oil won't be affected by more supply. Aline from the recent film "There Will Be Blood" reminds us of the spirit this country's original oil entrepreneurs once had.[20]
While Circuit City managed an impressive 27% rally, boosting the closing price to $4.97 a share, highest since mid-February, Blockbuster dropped 10% as investors questioned the ability of the movie rental chain to take on a business where it has no expertise. "We are initially skeptical of the advantages that would accrue from such an agreement," writes Scot Ciccarelli, analyst at RBC Capital Markets. Blockbuster has offered $6 to $8 a share, or up to $1.35 billion, to try to buy Circuit City, but Mr. Ciccarelli recommends "aggressive" selling at any price higher than $7 a share for CC. "Due to the company's current financial situation, we believe it would be difficult to justify an $8 price point," he writes. As earnings for major financial firms dominate the landscape this week, investors have been busy in the options market making bets on (or hedging against) more weakness in the shares of the stocks. Put options (the option to sell a stock at a given date at a given price) on names such as U.S. Bancorp and Wells Fargo, which report Tuesday and Wednesday, respectively, were very active Monday, outpacing activity in call options (the option to buy at a later date and given price), suggesting a bit of caution among investors.[5] The rise in common and preferred shares added 9.2 percent to the company's market valuation, increasing it to 421.9 billion reais ($250.3 billion).[19]
Petrobras shares soared $8.78, or 7.8 percent, to $121.63 in afternoon trading.[13]
Shares of Petrobras, Brazil's largest corporation, trade on the Sao Paulo, New York, Madrid and Buenos Aires stock exchanges, but the Brazilian government retains control through a golden share.[22] The Securities and Exchange Commission of Brazil, which supervises the operation of the stock market in the country, criticized the announcement by the ANP director, which prompted a sudden climb of Petrobras' stocks on the Sao Paulo Stock Exchange (Bovespa).[17]
"More conclusive data on the potential of the discovery will only be known after the completion of further phases in the evaluation process," Petrobras said in a statement to Brazil's stock exchange.[23]
Petrobras said it had informed the ANP of the discovery in the BM-S-9 exploration block in Brazil's Santos Basin in September, after it had found oil in one exploration well, but so far hadn't made a comment on the possible size of the block.[7] According to World Oil, the Pao de Acucar reserve lies in the BM-S-8 exploration block of Brazil's Santos Basin, which is adjacent to the BM-S-9 block.[7]
The block is operated by Petrobras with a 50% stake, while Royal Dutch Shell PLC (RDSA) has a 40% stake and Portugal's Galp Energia (GALP.LB) 10%. World Oil Magazine said that it's likely the Pao de Acucar find is a large structure that extends into the Carioca find in the adjacent BM-S-9 block, and possibly also to the BM-S-21 and the BM-S-22 blocks.[21]
A Petrobras spokesman had no comment on the reports. The company may put out a statement later in the day, he added. World Oil Magazine said on its Web site in February that if reports on the field prove correct, the Carioca and Sugar Loaf fields combined "would be the third-largest field in the world."[21] The salt layer of the second well drilled in block BMS-9 of the announced oil field has not even been reached yet, and the huge field, if it does exist, lies below the salt layer, the company said in a statement.[17]
The 2006 discovery in the Gulf of Mexico by Chevron, Devon Energy and Norway's Statoil of an oil field containing as much as 15 billion barrels of crude is still another example.[20] Tupi was the largest discovery since Kazakhastan's Kashagan field, which has 12 billion barrels of recoverable reserves.[9]
The discovery could be the world's third largest reserve and four times larger than the offshore Tupi oil field announced last November.[13] Haroldo Lima told reporters the find would be five times larger than last year's giant subsalt Tupi discovery. He would not say whether the reserve estimate was recoverable or in-place.[11]
The Carioca field, also known as BM-S-9, is located beneath a layer of salt in the deepwater Santos Basin off Brazil's southeastern coast, where Petrobras in November announced the discovery of the 8 billion-barrel Tupi field. "This would be a giant field under any circumstances,'' Merrill Lynch analysts Frank McGann and Shariff Koya said today in a note to clients.[19] Nobel Corp (NE) announced a $4 billion contract with Petrobras to drill in the newly discovered Tupi field, which is next door to the Carioca field.[12]
Norwegian companies Seadrill and MPF Corp. have oil drilling contracts with Brazil's Petrobras worth at least $4.7 billion.[13]
One of the more active among the day's big gainers on the Big Board was Petroleo Brasileiro SA, or Petrobras, whose ADRs gained 8% on reports of a new oil discovery in Brazil.[5] According to reports, the company has made a "gigantic new discovery" in Brazil's ultradeep pre-salt oil area.[6]
The discovery will further boost Brazil's prospects as an important world oil province and the leading source of new crude in the Americas.[9]
OTTAWA - - Brazil's state-controlled Petrobras SA has made what could prove to be the largest oil discovery in 30 years, deep under the Atlantic Ocean and one that would propel the already prospering country into the major league of oil exporters.[2] The block is 45 percent-controlled by Petrobras, Brazil's state-controlled oil company, Folha said.[8]
Petrobras, an integrated energy company and the global leader in deepwater oil exploration and production, operates in 27 countries in the Americas, Africa, Asia and Europe.[22] "A bid on gas could prove positive for exploration and production names like Anadarko Petroleum and Chesapeake Energy." Opposition lawmakers continued protests in Mexico's lower house of Congress, where they have been camped out for almost a week to protest an oil reform proposal.[13]
The coordinator of Mexico's ruling conservative party in the Senate says it is unlikely Congress would approve the bill by April 30, when the legislative session ends. Pakistani President Pervez Musharraf wants Beijing to build oil and gas pipelines linking his country with China's west as the two countries expand commercial ties. China is sharply increasing oil and gas imports to fuel its booming economy, and Musharraf said he hoped it would see Pakistan as an "energy and trade corridor" to the Middle East.[13]
Adding reserves from Brazil's ultradeep pre-salt area will transform the country's oil and gas reserves into the world's eighth largest, Gabrielli said on Nov. 8.[7] Brazil's offshore has become one of the hottest development regions in the global oil business, rivalling the offshore area of west Africa, with which it shares similar geology.[2] Shares of Brazil's state-run oil firm Petroleo Brasileiro SA ( PBR : sentiment, chart, options ) have hit a gusher today, soaring more than 6% to trade just shy of a fresh all-time high.[6]
Brazil holds an estimated 12 billion barrels of crude reserves, South America's second-largest deposit behind Venezuela, according to London-based BP Plc. If the 33 billion- barrel estimate for Carioca is confirmed by additional drilling, Brazil's reserves would surpass those of Libya. [19] Credit Suisse oil analyst Emerson Leite in a report in November said the Carioca formation has similar characteristics to Tupi, including potential volumes. Leite in his report said Carioca could have reserves in the " range of 3 to 5 billion BOE, or 60% of Tupi, lower due to the deeper characteristics of the reservoir."[7] Credit Suisse analyst Emerson Leite in January reportedly said that the fields of Pao de Acucar and Carioca in the pre-salt area combined could have up to 24 billion BOE in reserves.[21]
Hess, which is a partner in efforts to find and tap subsea reserves adjacent to Carioca, closed 9.1 higher at $101.19 in New York. [19] At the pump, the national average price of a gallon of gas edged lower overnight to $3.373 a gallon, 0.1 cent shy of a new record set Sunday, according to a survey of stations by AAA and the Oil Price Information Service.[13] "All the data were already in the public domain, having even been published in the February edition of World Oil magazine, in the 'What's new in exploration' column signed by Arthur Berman," the agency said in a statement.[3] Just last week, a new report concluded that the Bakken oil basin, stretching from North Dakota and Montana into Canada, contains an estimated 4 billion-plus barrels of oil.[20] Colorado and Utah are estimated to contain as much as 1.2 trillion barrels of oil trapped in shale below ground. They're not counted as "recoverable" reserves because until recently they weren't economical. Today they are.[20]
Conventional wisdom is that the U.S. has just 30 billion barrels of oil left, enough for just 10 years of pumping at current rates.[20] There is also no description on the NPA estimates of 33 billion barrels on whether that is oil in place or recoverable.[12]
There is oil there as proved by the first well BUT it could be a decade and $10 billion dollars later before the first barrel arrives at the surface.[12] Light, sweet crude for May delivery rose $1.62 to settle at $111.76 a barrel as the dollar weakened. Many investors regard commodities such as oil as a hedge against a weak dollar and inflation.[13] Oil prices are close to last week's trading record of $112.21 a barrel.[13]
Once the volumes of extracted oil slow to less than the high costs of maintaining the platforms then the well is capped leaving millions of barrels in the ground.[12] Deciding how much oil is in a particular field after having only drilled one well is laughable and the NPA head may need to find another job.[12] The deep-water discovery - coming after a similar find announced last year by Petrobras - suggests that the world still has major pools of oil to be found.[2] Petrobras said in a statement that more studies are needed to determine the potential of what could be the planet's largest oil find in decades.[1]
Petrobras also said it has started drilling a second well in a different area of the BM-S-9 block in late March, but so far hasn't reached the necessary depth to know whether oil was there as well.[7] Petrobras' press office has not confirmed the discovery yet, but informed that the Sugar Loaf field is located in block BMS-9 of the Santos Basin, west of the BMS-11, where Tupi was discovered.[16] Petrobras said it will start producing 100,000 barrels a day at Tupi in 2011 and that the field later could reach a peak output of up to 1 million barrels a day.[7]
Petrobras followed up with a blockbuster find of natural gas in the Jupiter offshore field in February.[13] Mr. Riedel said Petrobras now has to worry that Brazil's politicians will look to the state-owned company to become a cash cow to finance anti-poverty programs, though development of the offshore projects will require massive amounts of capital investment.[2] Petrobras is the fourth-most valuable company in the Western Hemisphere, behind Exxon Mobil Corp., General Electric Co. and Microsoft Corp., according to Bloomberg data. "We think this is part of a major transformation of Petrobras, which could lead to it becoming a much larger company in terms of production and reserves over the next 5-10 years,'' the Merrill analysts wrote.[19] Oil production in Mexico, one of the top three suppliers to the U.S., is declining, and reform advocates say state oil company Petroleos Mexicanos (Pemex) needs outside resources and technology to explore for reserves.[13] "Peak oil" advocates in the U.S. argue that we're already at the end of our large-scale recoverable reserves.[20]
State-run oil firm Petróleo Brasileiro SA, or Petrobras, said Monday that it needed more data to evaluate the size of the latest discovery. [23] Petrobras' statement said that the first well drilled in the area in September 2007 has produced promising results, which have been already released to the market and still need to be confirmed by further drillings.[17] Tupi, the BM-S-9 block and adjacent exploration blocks lie in Brazil's promising but ultradeep pre-salt area.[7] According to the ANP director, the field, temporarily named "Sugar Loaf," in reference to Rio's landmark, would be five times larger than Tupi, the giant field discovered in November 2007.[16] To determine even remotely reliable reserve estimates for a new field requires multiple wells in different locations to delineate the length/width of the field and then conduct flow tests from the different test wells.[12] Petrobras shares soared on the news, finishing 5.63 percent higher at 82.97 reais after gaining more than 7 percent earlier in the session.[3] Petrobras' American depository shares closed up 8.3 percent in New York, or US$9.33 (euro5.88) to US$122.18 (euro76.99).[1]
Petrobras shares closed 5.63% higher in Sao Paulo Monday at 82.97 reals ( $49.18 ).[7]
Environmental Capital collects and analyzes news in everything from oil to gas, from ethanol to wind power. [5] The agency is in charge of regulating the oil and gas sector in the country.[17]
SOURCES
1. The Associated Press: Brazil Oil Field Could Be Huge Find
2. reportonbusiness.com: Big find would give Brazil a boost
3. UPDATE 4-New joint oil find may be biggest yet in Brazil | Industries | Energy | Reuters
4. AFP: Brazil finds new oil field, possibly among biggest in the world
5. MarketBeat Blog - WSJ.com : Four at Four: Audio-Video Plug-Ins
6. Schaeffer's Investment Research - Schaeffer's Daily Market Blog: Breaking Option News, Commentary, & In-depth Analysis
7. 2nd UPDATE: Petrobras: Need More Data For New Field Estimate
8. Bloomberg.com: Latin America
9. Possible Major Oil Find in Brazil | IBT Commodities & Futures
10. ANBA
11. Brazil ANP says Carioca find may have 33 bln boe | Markets | Markets News | Reuters
12. Petrobras - A Belated April Fools Joke?
13. Energy Sector Roundup: Oil Near a Record | Chron.com - Houston Chronicle
14. The Associated Press: Brazil Oil Field Could Be Huge Find
15. Brazil official cites giant oil-field discovery - International Herald Tribune
16. Brazil discovers World's 3rd-largest oil and gas reserves_English_Xinhua
17. Brazil's Petrobras denies giant oil field discovery_English_Xinhua
18. New Brazil discovery may be giant - Offshore
19. Bloomberg.com: Latin America
20. Drilling The Future
21. UPDATE: Petrobras Shares Surge On Report Of Major Discovery
22. Worker dies at Brazilian oil company's offshore platform
23. Free Preview - WSJ.com
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