Exclusive: Petrobras, IBV wells show major new oil find in Brazil

Thu Sep 26, 2013 3:31pm EDT
 
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By Jeb Blount

RIO DE JANEIRO (Reuters) - A drilling campaign off Brazil's northeastern coast shows that an area controlled by Petrobras and an Indian partner likely holds more than a billion barrels of oil, government and industry officials told Reuters, bolstering hopes that the region will soon become the country's biggest new oil frontier.

Petroleo Brasileiro SA (PETR4.SA: Quote), as Brazil's state-run oil company is formally known, and IBV Brasil, a 50-50 joint venture between India's Bharat Petroleum Corp (BPCL) (BPCL.NS: Quote) and Videocon Industries Ltd VEDI.NS, have determined the SEAL-11 exploration block contains very large amounts of high-quality light crude oil and natural gas, according to five government and industry sources with direct knowledge of the drilling results.

The SEAL-11 block and adjacent areas, 100 kilometers (62 miles) off the coast of the Brazilian state of Sergipe, may hold more than 3 billion barrels of oil in place, according to two of the sources. If confirmed, that would make the block - owned 60 percent by Petrobras and 40 percent by IBV - one of the biggest global discoveries of the year.

Petrobras has been betting that the waters off Sergipe hold large quantities of oil and gas since it bought rights to drill in the area a decade ago. As the block's operator, Petrobras has registered finds in the area with Brazilian regulators in recent years as required by law, but has yet to announce estimates of the potential size of the resource. The latest drilling makes clear how large the find may be, the sources said.

The area, where Petrobras is now drilling evaluation wells, also offers the chance to boost Brazilian output with resources that are cheaper and easier to drill than the country's giant deepwater "subsalt" reserves more than 1,500 kilometers to the south. First production from SEAL-11 and adjacent areas is expected in 2018, Petrobras said in a statement.

"Sergipe, without a doubt, has great potential and excellent perspectives," a Brazilian government official with direct knowledge of Petrobras and IBV's discoveries and development plans told Reuters. "I would say that Sergipe is the best area in Brazil in terms of perspective after the subsalt."

The subsalt is the name given to a series of oil reserves trapped far beneath the seabed under a layer of salt south of Rio de Janeiro in the Campos and Santos basins.

The Sergipe estimates and outlooks shared with Reuters are based on at least 10 oil and gas strikes in seven wells reported to Brazil's petroleum regulator, the ANP, since June 16, 2011.   Continued...