MercoPress. South Atlantic News Agency

Petrobras finds more light oil and keeps increasing reserves

Petrobras shares rose Friday a day after Brazil's government owned oil company said it found more oil in the offshore Santos Basin. Shares rose 4.88, or 4.5%, to $112.88 in afternoon trading.

According to a release from the company the consortium of Petrobras (80% and Operator) and Portugal's Galp Energia (20%) discovered light oil in a pioneer well located 280 kilometres off the coast of the State of Sao Paulo, 2.234 meters below sea surface. The well's depth's in the Santos Basin pre-salt layer is 5.350 metres. "The well has not been tested yet", said the release but the consortium will undertake the necessary activities and make the required investments to check the field's dimensions. Petrobras expects domestic oil and gas production to rise more than 14% next year from the average so far this year as platforms that had come on stream with delays in 2006 reach capacity and others are incorporated. Petrobras said in a statement output should rise to 2.36 million barrels per day of oil equivalent. However it did not provide separate figures for expected oil and natural gas output. In the first 11 months of this year, oil production averaged 1.79 million bpd and gas output was about 271,300 bpd in oil equivalent. The company said it would spend 14.4 billion US dollars in 2008 in exploration and production out of a total investment of about 27.5 billion US dollars in line with its previously announced five-year strategic plan. This year, Petrobras had been expecting a production rise of more than 10%, but delays with starting up new platforms have left output so far in 2007 practically flat compared with last year's 1.78 million bpd. Petrobras did not provide a proven national reserves level for 2007, but said the reserves, which stood at 13.75 billion barrels in 2006 under the Society of Petroleum Engineers criteria, should "maintain a continuous growing trajectory, now strongly boosted by recent discoveries in the Tupi area. Petrobras last month announced a reserve estimate at the sub-salt Tupi field of between 5 billion and 8 billion barrels of light oil and gas, which, if confirmed, would make it the world's biggest deepwater discovery. Petrobras wants to start a long-term production test there in early 2009 before it cranks up a 100,000 bpd pilot project in 2010 or 2011, Petrobras Chief Executive Jose Sergio Gabrielli said on Wednesday during a year-end reception. Brazil became self-sufficient in oil in net terms last year, but it keeps importing some light crude to mix with the predominantly heavy local oil for refining. Petrobras sees average annual production growth of more 7% through 2012, when crude output should reach 2.42 million bpd. Referring to last week's UBS report suggesting that Tupi may have an even larger neighbor, Gabrielli said it was based "on the same information we released when we announced the Tupi reserve" and that Petrobras had nothing to add so far. It said then the area of potential further sub-salt oil reserves stretches for 800 km along the coast and that Brazil could jump from its 17th position in the ranking by reserves and overtake Nigeria, now No. 10 with 36.2 billion barrels, if more reserves are confirmed. Next year Petrobras will launch a 180,000 bpd production platform on the Marlim Sul field and two units, with a capacity to pump 180,000 bpd and 100,000 bpd respectively, on the Marlim Leste field in the Campos basin. It also plans to start up a 15,000 bpd production test rig on the Badejo field and a platform with a capacity to produce 10 million cubic meters of natural gas per day and 25,000 bpd of crude on the Camarupim field.