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Brazil says subsalt oil finds could triple total reserves

Brazil Institute — Tue, 12 Mar 2013 15:34:38 +0000

Brazil’s giant subsalt oil and gas region could yield 35 billion barrels of recoverable oil equivalent, more than double Brazil’s existing reserves, an energy ministry representative said on Tuesday.

Analysts have said the total amount of oil in the New York State-sized subsalt region that was discovered in 2007 could be about 100 billion barrels of recoverable oil, or enough to provide all current U.S. oil needs for about 14 years.

“Subsalt discoveries that have been evaluated so far suggest a volume of recoverable oil more than double Brazil’s proven reserves,” said Marco Antonio Martins Almeida, secretary of oil and gas at Brazil’s Ministry of Mines and Energy.

Petrobras finds light oil off Brazil coast

Brazil Institute — Thu, 01 Mar 2012 09:10:13 +0000

Trinidad & Tobago Guardian, 02/28/2012

Brazilian energy giant Petroleo Brasileiro SA, or Petrobras, announced last Friday that it has found light oil in deep waters off the nation’s coast in a block jointly exploited with foreign firms. A company statement said the discovery was verified by oil sampling in tests performed in reserves located at an approximate depth of 5,250 metres.

The new well, named Cariocal Sela, is in block BM-S-9 of the so-called pre-salt oil reserves, off Brazil’s southeast Atlantic coast beneath kilometres of ocean, bedrock, and hot salt-beds. The National Petroleum Agency estimates that these huge pre-salt reserves, discovered in 2010, could hold more than 100 billion barrels of high-quality recoverable crude.

The Petrobras statement said 27 API oil—petroleum liquid above ten on the API scale is termed light oil—was recovered at a depth of 2,149 metres in the well 270 kilometres from the coast of Sao Paulo state. The company said a consortium formed by Petrobras, the United Kingdom’s BG Group and Repsol Sinopec Brasil—an alliance of Spain’s Repsol and China’s Sinopec—would continue the activities and necessary investments for assessing the reserves found in the area, including the drilling of new wells.

Brazil's Petrobras confirms new pre-salt oil discovery

Brazil Institute — Wed, 29 Feb 2012 14:58:28 +0000

Rogerio Jelmayer – The Wall Street Journal/Dow Jones Newswires, 02/29/2012

Brazilian oil company Petroleo Brasileiro SA (PBR), or Petrobras, confirmed late Tuesday the discovery of a new hydrocarbon accumulation in the pre-salt layer of the southern Campos Basin.

The discovery was made in the Pao de Acucar prospect, about 195 kilometers offshore Rio de Janeiro state at a water depth of 2,800 meters.

The company didn’t provide an estimated volume for its new discovery.

Analysis: Chevron spill lifts cover on Brazil oil risks

Brazil Institute — Mon, 28 Nov 2011 14:05:08 +0000

Jeb Blount – Reuters, 11/27/2011

Motorists are shown at gas pumps at a Chevron gasoline station in Burbank, California July 31, 2009. REUTERS/Fred Prouser

Brazil’s government has been quick to vilify Chevron Corp for an offshore oil spill, but the biggest victim of the accident could turn out to be its own ambitious dream of exploiting its new oil riches.

The second-largest U.S. oil company has emerged bruised from a week in which it was fined $28 million, had its local chief executive hauled in front of Congress and then had its Brazilian drilling rights suspended as punishment for the undersea leak estimated at 2,400 barrels.

Yet industry insiders believe California-based Chevron will win back its rights, barring the discovery of any criminal or gross negligence in its Frade field where the accident occurred. The fine is tiny compared to the company’s $187 billion market value and it said on Friday it is interested in bidding on new concessions in Brazil.

Brazil hopes to add oil wealth to booming economy

Brazil Institute — Thu, 08 Sep 2011 14:48:59 +0000

Alan Greenblatt – NPR, 09/07/2011

Brazil's energy company, Petrobras, inaugurated a new offshore platform on June 3 in Angra dos Reis. Brazil has located major offshore oil fields and plans to greatly increase production in the coming years. Ari Versiani/AFP/Getty Images

*Brazil Institute Director, Paulo Sotero, weighs in on the future of Brazil’s oil industry.

When people say Brazil won’t be the next Saudi Arabia, they mean it in a good way.

Brazil has discovered enormous oil reserves far off its coast, but the country’s robust and varied economy means it shouldn’t become dependent on oil.

“Brazil is not just going to be an oil-exporting country,” says Paulo Sotero, director of the Brazil Institute at the Woodrow Wilson Center for International Scholars. “That’s not all it’s going to do.”

In deep waters

Brazil Institute — Mon, 07 Feb 2011 15:45:03 +0000

The Economist, 02/03/2011

Photo: Reuters

The coast of Rio de Janeiro is 290km and 70 minutes away as the helicopter flies. High overhead, gas is flaring; underfoot, enough oil to fill 330,000 barrels is waiting to be offloaded. The ocean floor is 2,150 metres beneath. Drill past 3,000 metres of rock and you will hit a layer of salt 2,140m thick. Only after boring through that fossilised ocean will you strike oil—6.5 billion barrels’ worth in the “Lula” field alone. (Supposedly, it is named for the Portuguese word for squid, not the former president called Lula for his curly hair.)

This is the Cidade de Angra dos Reis, a tanker refitted for oil production and storage, moored by 24 piles torpedoed into the ocean bed. It now pumps 14,000 barrels of oil a day (b/d), but once its gas pipeline is connected in March, it will rev up towards 100,000 b/d. The “sub-salt” fields that Brazil is developing are thought to hold over 13 billion barrels of oil. By 2020 Petrobras, the country’s government-controlled oil firm, will be pumping 4m b/d in Brazil, double today’s amount—if all continues to go well.

That is a big “if”. These ultra-deep deposits must be drilled at up to three times the normal pressure for offshore oil. The salt often shifts and closes up after drilling. Some of the chemicals in the oil are highly corrosive. And the distant fields are hard to reach, for both people and pipelines.

Brazil congress makes Petrobras sole pre-salt operator

Brazil Institute — Fri, 03 Dec 2010 15:31:57 +0000

Maria Luiza Rabello and Peter Millard – Bloomberg, 12/02/2010

Brazil’s lower house of Congress approved new oil regulations that will increase government control over the energy industry and reduce competition against Petroleo Brasileiro SA, the state-controlled producer.

The regulations approved yesterday allow Petrobras, as the company is known, to be sole operator of oil fields where licenses haven’t yet been auctioned. The oil producer will be able to explore every field in areas designated “strategic.” The bill needs the president’s signature.

Brazil is tightening the state’s grip on the domestic oil industry after the discovery of the Tupi and Libra fields, which may hold as much as 8 billion barrels of oil and 15 billion barrels, respectively.

Petrobras begins deepwater pre-salt commercial crude production

Brazil Institute — Fri, 16 Jul 2010 20:49:08 +0000

07/16/2010

A ceremony was held on board the Capixaba floating production, storage and offloading vessel to mark the start of output from the well. President Lula da Silva was on hand and was photographed with his hands covered in oil extracted from the Baleia Franca field, located 85 kilometres offshore.

Lula da Silva held up a miniature oil barrel that he said “symbolizes the independence Brazil will have in the future”.

He also hailed Brazilian technology, which he said would ensure that a disaster along the lines of BP’s massive oil spill in the Gulf of Mexico does not occur in Brazil, according to a statement from his office.

Deepwater oil drilling under scrutiny as Brazil's Petrobras delays flotation

Brazil Institute — Thu, 24 Jun 2010 17:14:16 +0000

Graeme Wearden – The Guardian, 06/23/2010

Brazil‘s national oil company Petrobras has surprised investors by postponing its $25bn (£16.86bn) stock market flotation, potentially delaying its efforts to extract oil from deepwater reserves off the coast.

The Petrobras stock offering, which had been scheduled for July, will now be delayed by two months until September. It blamed the move on Brazil’s ANP energy regulator, which needs more time to assess the value of oil reserves which lie deep below the seabed off the coast of Rio de Janeiro.

The flotation of Petrobras is a key part of the country’s efforts to extract huge quantities of high-quality oil which lie around 280 miles offshore. These reserves are trapped around 4,000 metres under the sea floor, beneath layers of salt and rock. There is also around 2,000 metres of seawater between the seabed and the surface, further complicating the drilling process.

Petrobras savours 'pre-salt' future

Brazil Institute — Mon, 14 Jun 2010 15:38:57 +0000

Jonathan Wheatley – Financial Times, 06/14/2010

Petrobras, Brazil’s national oil company, is preparing a share issue to raise an estimated $25bn as early as next month in a crucial step for developing its “pre-salt” oil fields – so called because they are trapped under several kilometres of sea water, rock and a hard-to-penetrate layer of salt – that promise to make the country one of the world’s biggest oil exporting nations.

Details of Petrobras’s capital plans are still sketchy, but an offering of that size would be the world’s biggest so far this year, trumping Agricultural Bank of China’s planned initial public offering next month, which looks set to raise about $20bn .

If the issue is successful, the new capital would allow the company to borrow more to fund the pre-salt development, without the company putting its valuable investment grade credit rating at risk.

Brazil’s Senate gave the plan the go ahead last week when it approved a package of legislation governing the pre-salt fields, which were discovered in 2007.

Oil revenue bill stirs political uproar in Brazil

Brazil Institute — Mon, 14 Jun 2010 14:33:48 +0000

Alexei Barrionuevo – New York Times, 06/11/2010

Brazil’s Senate has approved a bill that would divide billions of dollars in oil royalties equally among the country’s states, threatening the country’s largest oil producing state, Rio de Janeiro, with the loss of up to $4 billion in revenue.

But the bill, which was approved Thursday, is not likely to become law. Brazil’s president, Luiz Inácio Lula da Silva, said in a radio interview later Thursday that he would veto it.

The Senate’s decision complicated matters for Mr. da Silva, who must choose between denying states that do not produce oil a share of Brazil’s ballooning oil riches and angering voters and officials in Rio, a state expected to be critical to this October’s presidential election. The president had been hoping to delay discussion of the bill until after the elections.

Forty percent of oil revenues currently go to Brazil’s federal government and 45 percent to the producing states. The rest go to other states and municipalities.

Petrobras makes two oil finds in Campos Basin

Brazil Institute — Thu, 25 Feb 2010 15:51:53 +0000

Reuters, 02/25/10

State-controlled energy firm Petrobras (PETR4.SA)(PBR.N) said on Thursday it had made two separate discoveries of oil in the Campos Basin near Brazil’s coast with recoverable reserves of 40 million and 25 million barrels.

The two discoveries were made in the same well, 6-BR-63A-RJS, but the larger reserves were “subsalt” oil, which lies below the first find in a deep layer of salt rock a few kilometers (miles) under the ocean floor.

Pre-salt oil so far...

samanthalima — Fri, 05 Dec 2008 21:22:22 +0000

Experts reckon that exploring the pre-salt oil requires an oil barrel at a price of 50/60 dollars to compensate the very high costs. The current price – around 40 dollars – makes the exploring unfeasible. The party of the pre-salt revenues is over even before it started…

Petrobras' slowdown

samanthalima — Fri, 07 Nov 2008 20:31:43 +0000

In a period of crisis, not even Petrobras can pretend that nothing has happened. The company would announce its investment plan for the period 2009/2013. For the first time, the company would include the huge investment necessary to bring oil from the pre-salt layer. But crisis came, and what they have planned until september was threw in the trash can. Before that, the company, for instance, intended to issue bonds in order to get 5 billion dollars. But, as we know, market is not friendly for borrowers, even for five-stars companies like Petrobras. Some specialists have already reckoned that exploring oil from 7,000 meters deep will cost, at least, 600 billion dollars. Just to help you to understand what it means, the company last year previewed that it would invest 112 billion dollars until 2012 – before they figured out what the pre-salt meant.

With less liquidity and with the urgent need of producing this oil (first, because it helps in the cash flow, and second because some exploring licenses will expire in 2010), they now have to decide what to do first and what can be left behind. Something is certain: there is no money for everything.

Nobody knows what will happen. The executives will try to discover until december, when the company will announce, finally, its investment plan. But the company has already understood that times changed. Last tuesday, Jose Sergio Gabrielli, CEO of Petrobras, used the company’s TV Circuit to say to all workers to avoid unnecessary expenses. Business travels, events and even the end-of-the-year party were cancelled, in order to cut costs.