MercoPress. South Atlantic News Agency

Petrobras oil and gas hit in Patagonia.

Petrobras Energia the Argentine branch of Brazilian oil group Petrobras reported an oil and gas discovery in Argentina's Patagonian province of Santa Cruz.

The Puesto Oliverio x-1001 exploratory well is located 180 kilometers northwest of Rio Gallegos and primary trials showed a daily production of 60,000 cubic meters (2.1 million cubic feet) of natural gas and 30 cubic meters (1,057 cubic feet) of oil from a depth ranging between 2,971 and 2,977 meters.

"We will carry out several tests shortly to determine the size of the field" reported the company in an official release.

The discovery was made in the El Martillo-El Campamento block which is part of the Santa Cruz I area where Petrobras Energia is exploring with Compañia General de Combustibles (CGC). Exploration plans for this area include drilling two additional wells this year and two more in 2005. Since 2003 Petrobras Energia has done 1,080 kilometers of 3D seismic survey.

The discovery coincided with the announcement of the Argentine Energy Secretariat that it had awarded the company two offshore blocks, CAA1 and CAA8, 150 miles from Bahía Blanca. According to contractual terms Petrobras Energia has four years for exploration activities following which if hydrocarbons commercial prospects prove appropriate it can continue with the second phase, production drilling.

Petrobras Energia has become Argentina's third-largest energy company accounting for 10% and 7% of the country's oil and gas production. Following deals with Repsol-YPF and the purchase of Perez Companc oil interests, the Brazilian group is now involved in exploration, production, gas and oil transport, petrochemicals, refining, electricity and fuel retailing.

Petrobras is also involved in Bolivia, Ecuador, Peru, Venezuela and the Gulf of Mexico.