Brazil’s Petrobras: latest subsalt oil find opens new frontier

Jeff Fick – Dow Jones Newswires, 02/26/2013

Brazilian state-run energy giant Petroleo Brasileiro (PBR, PETR4.BR), or  Petrobras, said late Monday that a new subsalt oil discovery opens a new  exploration frontier in the Santos Basin, where billions of barrels of crude  have already been discovered.

The first well drilled in the offshore BM-S050 block, dubbed Sagitario, was  found to contain high-quality oil, Petrobras said. Petrobras operates the block  with a 60% stake. The local unit of BG Group PLC (BG.LN) holds 20%, while Repsol  Sinopec Brasil retains the remaining 20%.

The discovery is significant because it was made to the west of the cluster  of oil discoveries made deep under a thick layer of salt off Brazil’s Atlantic  Ocean coast in the mid-2000s. The Lula field, which holds estimated recoverable  reserves of between 5 billion and 8 billion barrels of oil equivalent, or BOE,  and is currently producing about 100,000 barrels a day, and the Sapinhoa field  that started pilot production earlier this month both sit due east of the  Sagitario discovery. Sapinhoa is estimated to hold recoverable reserves of 2.1  billion BOE.

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Brazil faces ‘tyranny of depth and darkness’ in drilling for deep-sea oil

Juan Forero – Washington Post, 12/08/2011

Juan Forero/TWP - Alexandre Anderson, head of a fishing cooperative, has watched his daily catch shrink as sludge from oil leaks and spills have fouled the waterways where he has fished, from Guanabara Bay to the coastline near Rio.

From his rickety fishing boat, Alexandre Anderson has watched his daily catch shrink. Over the years he’s also seen sludge from oil leaks and spills — to him an omen of what is to come as Brazil develops some of the world’s biggest and most technically challenging offshore oil fields.

But Anderson, 40, head of a fishermen’s cooperative, is a lone voice against one of Brazil’s most powerful sectors, a rapidly expanding oil industry that in recent years notched important deep-sea discoveries that have united Brazilians in a patriotic fervor. Those “elephant fields” 200 miles offshore have given Brazil one of the world’s largest proven reserves of oil and instantly made a country known more for soybeans and sugar cane a potential rival to heavyweight oil exporters such as Nigeria and Qatar.

Yet signs have emerged that the oil production, in swirling, frigid waters going down five miles, could pose serious hazards in a country that holds itself up as an international leader on environmental matters. In November, an undersea leak at the Frade field operated by Chevron spewed 3,000 barrels about 230 miles off northeastern Rio state, shaking the sense of security that Brazil’s regulators had about producing oil off this picturesque coast.

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