MercoPress. South Atlantic News Agency

Petrobras first tests in the Franco sub-salt field confirm 50.000 bpd

The field holds an estimated 4.5 billion barrels of recoverable oil according to Brazil’s oil regulator

Brazil’s oil regulator ANP said it concluded its first test at the Franco offshore field, which holds the oil reserves that the government may sell state-controlled Petroleo Brasileiro SA, Petrobras, in exchange for new stock.

The first test at the 2-ANP-1-RJS well indicates that it may have the potential to produce about 50,000 barrels of light oil a day ANP said Monday in an e- mailed statement.

The ANP said on May 12 that Franco holds an estimated 4.5 billion barrels of recoverable oil, making it the second-largest oil find in Brazil after Tupi was discovered by Petrobras.

Brazil’s ANP is exploring Franco as part of a plan to sell Petrobras the rights to as much as 5 billion barrels of reserves in an area known as the pre-salt region. The company is waiting for the government to value the oil reserves before moving ahead with a planned share offering.

The ANP is also drilling the Libra well near Franco. Both are in deep waters of the Santos Basin. Tupi was the largest oil discovery in the Americas since Mexico found Cantarell in 1976.

Petrobras also announced the board approved allowing minority investors to use Treasury bonds as payment for new shares in a planned 25 billion USD offering.

Details on what types of debt can be used to buy stock will be released at “the right time” Petrobras in a regulatory filing. The corporation said it is giving minority shareholders the same “treatment” as the government.

Brazil’s government, which owns 56% of the company’s voting stock, plans to buy shares with bonds. As part of the transaction, Petrobras will then sell the bonds back to the government in exchange for as much as 5 billion barrels of deepwater oil reserves. Petrobras is issuing new shares to help finance 224 billion USD in investments through 2014 to boost oil production and expand its refining capacity.