Petrobras: Deep Offshore Wells a New Frontier

Bloomberg reported that Petroleo Brasileiro SA, Brazil's state- controlled oil company, opened a new exploration frontier with the discovery of oil beneath more than two kilometers of ocean and two kilometers of rock a company official said. While Petrobras doesn't know the extent or size of the oil deposits found about 250 kilometers off the shore of Rio de Janeiro, it is the first time oil has been found under such conditions, offering the chance that Petrobras may increase the production of light crude oil faster than expected, Gabrielli said in an interview.

The discovery may be as large as the Campos Basin, Brazil's largest offshore district, said Haroldo Lima, head of Brazil's national petroleum agency, or ANP, in an interview. Brazil produces 1.5 million barrels a day in Campos, or more than three quarters of its 1.9 million barrels a day Brazilian production and more than two thirds of its 2.3 million barrel total daily worldwide output, according to Petrobras's Web site.

Petrobras's board on June 30 approved a 66 percent expansion of investments to $87.1 billion for the 2007-2011 period. Petrobras, which is spending about $4 billion a year just to maintain current production levels, expects the expansion will help it find new reserves to double production to about 4.5 million barrels a day in 2015.

The discovery, made in partnership with BG Group Plc and Petrogal SA shows signs of new oil layer beneath much of Brazil's existing oil reserves of 13 billion barrels to 14 billion barrels. Source: Bloomberg