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.

Read more…

Brazil oil royalty plan passes one hurdle

Leonardo Goy – Reuters, 10/20/2011

Brazil’s Senate on Wednesday approved a plan to distribute oil royalties more widely among feuding states, a small step toward relaunching the development of the country’s vast offshore reserves.

But the bill still faces several hurdles that could stall new investments in deepwater offshore areas. The proposal now faces a contentious vote in the lower house of Congress and potentially a slew of law suits by oil-producing states that stand to lose oil revenue.

At stake is the development of some of the world’s largest crude reserves held in an area known as the subsalt, a region the size of New York state believed to hold more than 50 billion barrels that could turn Brazil into a major oil exporter.

Read more…