MercoPress. South Atlantic News Agency

Petrobras announces discovery of new high-quality deep water oil deposit

Extracting the ultra deep oil still remains a formidable technical challenge

Brazilian government controlled oil and gas corporation Petrobras announced the discovery of a new high-quality crude deposit in ultra-deep waters off Brazil’s south-eastern coast.

Located in the Albacora field of the Campos basin, about 170 kilometres off the coast, the deposit is part of the vast, newly discovered pre-salt region.

The accumulation was discovered after drilling the 6-AB-119D-RJS well to a depth of 4,385 meters, says an official release.

The preliminary analysis indicates the deposit holds an estimated 350 million barrels of high-quality crude, Petrobras said.

Located in a roughly 160,000-sq.-kilometer offshore area, the pre-salt fields are estimated to contain roughly 80 billion barrels of oil equivalent and could potentially transform Brazil into a major crude exporter.

However reaching and extracting those resources will be very costly and pose an enormous technical challenge because they are located at depths of up to 7,000 meters.

Drastic changes in temperature as the oil is brought to the surface also add to the technical complexity of developing those fields.

A law signed late last year declares the pre-salt reserves to be state property and stipulates that they will be explored and developed by consortiums in which Petrobras will have a minimum 30% stake.

It establishes a production-sharing model in which the consortiums must give the Brazilian government a percentage of the extracted crude. They will also be required to make royalty payments.

Under the legislation, Petrobras is the operator of all projects and also can be awarded exploration contracts without a competitive bidding process.