Huge New Oil Field Found Rio de Janeiro

nigel-aib · #1 17-04-2008, 04:14 PM

AP) A deep-water exploration area off Brazil's coast could contain as much as 33 billion barrels of oil, the head of Brazil's National Petroleum Agency said Monday. That would make it the world's third-largest known oil reserve.

Haroldo Lima cautioned that his information on the field off the coast of Rio de Janeiro is unofficial and needs to be confirmed.

The state-run Petrobras oil company declined comment on what would be the planet's largest oil find in decades, and its shares moved wildly in positive territory after Lima made the comments.

By early afternoon, the company's American depository shares were up 8.5 percent in New York, or $9.54, to $122.39. Petrobras shares in Brazil went on a wild rise, fluctuating between 2 percent and 7 percent higher and settling and up nearly 5 percent in late afternoon trading.

Lima told reporters that Petrobras "may have discovered a huge petroleum field that could contain reserves large as 33 billion barrels," amounting to the world's third-largest reserve, according to his spokesman, Luiz Fernando Manso.

Manso did not provide any details about where Lima got his information, except to say it came from "non-official, non-confirmed sources."

Lima's agency regulates Brazil's oil industry, and his comments appeared to represent confirmation of what experts have long suspected: That extremely deep exploration areas hundreds of miles (kilometers) off the nation's coast may hold potentially huge reserves.

Brazil's current proven oil reserves are 11.8 billion barrels, according to the U.S. Energy Department. The U.S. has 21.8 billion barrels in proven reserves.

"You're talking about a reserve the size of total U.S. reserves," said Tim Evans, an analyst with Citigroup Inc. in New York. "It's a big, big number."

If proven, the oil in the Carioca exploration area would also be five times larger than the Tupi oil field, whose estimated reserves of 8 billion barrels were announced by Petroleo Brasileiro SA in November. Petrobras also announced a blockbuster find of natural gas in February in an Atlantic Ocean field nicknamed Jupiter.

Industry experts say the Tupi and Jupiter fields alone could turn Brazil into a major oil and gas exporter and lead to it joining OPEC.

Nobody really has data on what's out there in the middle of the ocean.

Tim Evans, an analyst with Citigroup Inc. in New YorkPetrobras is renowned for its deep-water drilling ability, and is widely regarded as one of the best state-run oil companies in the world.

Brazil became self-sufficient in oil production in 2006 but must import light crude oil for the refined products it needs. The country produces - and exports - mostly heavy crude oil, which has to be mixed with the light oil in refineries.

While the potential Brazil find could add significant supplies to a global oil market many see as tight, it would likely take the better part of a decade before any of oil finds its way to market. The site will need to be studied further, and drilling platforms must be designed, built and transported before it can start producing oil.

However, it does cast new doubt on peak oil theory, which postulates that world oil demand will soon outpace supply.

It is impossible to say whether or not more 33-billion-barrel oil fields exist under the sea, Evans said.

"Nobody really has data on what's out there in the middle of the ocean," Evans said.

Dotty · #2 17-04-2008, 07:16 PM

No , I guess they would not have data.The Atlantic is rather large.

Quote:

Originally Posted by nigel-aib

AP) A deep-water exploration area off Brazil's coast could contain as much as 33 billion barrels of oil, the head of Brazil's National Petroleum Agency said Monday. That would make it the world's third-largest known oil reserve.

Haroldo Lima cautioned that his information on the field off the coast of Rio de Janeiro is unofficial and needs to be confirmed.

The state-run Petrobras oil company declined comment on what would be the planet's largest oil find in decades, and its shares moved wildly in positive territory after Lima made the comments.

By early afternoon, the company's American depository shares were up 8.5 percent in New York, or $9.54, to $122.39. Petrobras shares in Brazil went on a wild rise, fluctuating between 2 percent and 7 percent higher and settling and up nearly 5 percent in late afternoon trading.

Lima told reporters that Petrobras "may have discovered a huge petroleum field that could contain reserves large as 33 billion barrels," amounting to the world's third-largest reserve, according to his spokesman, Luiz Fernando Manso.

Manso did not provide any details about where Lima got his information, except to say it came from "non-official, non-confirmed sources."

Lima's agency regulates Brazil's oil industry, and his comments appeared to represent confirmation of what experts have long suspected: That extremely deep exploration areas hundreds of miles (kilometers) off the nation's coast may hold potentially huge reserves.

Brazil's current proven oil reserves are 11.8 billion barrels, according to the U.S. Energy Department. The U.S. has 21.8 billion barrels in proven reserves.

"You're talking about a reserve the size of total U.S. reserves," said Tim Evans, an analyst with Citigroup Inc. in New York. "It's a big, big number."

If proven, the oil in the Carioca exploration area would also be five times larger than the Tupi oil field, whose estimated reserves of 8 billion barrels were announced by Petroleo Brasileiro SA in November. Petrobras also announced a blockbuster find of natural gas in February in an Atlantic Ocean field nicknamed Jupiter.

Industry experts say the Tupi and Jupiter fields alone could turn Brazil into a major oil and gas exporter and lead to it joining OPEC.

Nobody really has data on what's out there in the middle of the ocean.

Tim Evans, an analyst with Citigroup Inc. in New YorkPetrobras is renowned for its deep-water drilling ability, and is widely regarded as one of the best state-run oil companies in the world.

Brazil became self-sufficient in oil production in 2006 but must import light crude oil for the refined products it needs. The country produces - and exports - mostly heavy crude oil, which has to be mixed with the light oil in refineries.

While the potential Brazil find could add significant supplies to a global oil market many see as tight, it would likely take the better part of a decade before any of oil finds its way to market. The site will need to be studied further, and drilling platforms must be designed, built and transported before it can start producing oil.

However, it does cast new doubt on peak oil theory, which postulates that world oil demand will soon outpace supply.

It is impossible to say whether or not more 33-billion-barrel oil fields exist under the sea, Evans said.

"Nobody really has data on what's out there in the middle of the ocean," Evans said.

robh · #3 17-04-2008, 08:36 PM

Have a look at this very positve story about Brazil in the economist:

Brazil | The delights of dullness | Economist.com

Dotty · #4 17-04-2008, 08:50 PM

Rob,you are clearly passionate about Brasil but you never seem to mention the negative sides and so you choose to focus on the positive side which is making money from over hyped investments.Do you feel the same about Bulgaria?

Quote:

Originally Posted by robh

Have a look at this very positve story about Brazil in the economist:

Brazil | The delights of dullness | Economist.com

Golfingworld · #5 17-04-2008, 09:07 PM

This is clearly a good thing whether confirmed or not seems a lot depends on the future oil price and extraction cost....doubt oil prices will drop. It does help to uplift confidence in Brazil that's for sure....still doesn't solve the problem of getting there cheaply mind you!

RalphJ · #6 17-04-2008, 10:10 PM

Quote:

Originally Posted by robh

Have a look at this very positve story about Brazil in the economist:

Brazil | The delights of dullness | Economist.com

Don't know how "impressive" it is....could be taken the other way, as if Brazil is at the peak of a cycle. Very good article although. The last paragraph summed it up nicely...

Quote:

How Brazil looks depends on which countries it stands next to in the line-up. True, compared with parts of Latin America, let alone Asia, its economy still seems to be a machine for creating disappointment out of abundance. Its politics are frustrating: corruption is rife in public life, violence widespread, illiteracy normal, poverty stubborn. And yet compared with the Brazil of old, this has the feel of a golden age. That, surely, counts for a lot.

michaelbush · #7 17-04-2008, 11:26 PM

Thanks for the post Rob - the article was very interesting. On balance it shows that Brasil has so much in its favour, and Lula, despite Dotty's opinion of him, is doing a reasonable job. Unfortunately corruption is still the norm, and a Brasilian friend/ client said that nobody gets accepted for candidacy unless they agree to eat from the same trough (at least that is a rough translation). He said it is therefore almost impossible to stop the corruption which Brasilians accept in silence. Election votes can be bought locally for the price of a can of beer and a free party. With so many women, it is a shame that there are so few females in politics.

#8 18-04-2008, 06:21 AM

yea, I heard about this.... well, it's a good thing. But the rich get richer in Brazil. 5% of the super wealthy (mostly based in Sao Paulo) control 95% of the country. There's a reason why the Brazilian Gov doesn't educate the masses--the'll stay stupid, which is what the politicians want, so they can in essence control the masses, which they are doing, and will continue to do....

robh · #9 18-04-2008, 02:34 PM

Quote:

Originally Posted by michaelbush

and a Brasilian friend/ client said that nobody gets accepted for candidacy unless they agree to eat from the same trough (at least that is a rough translation). He said it is therefore almost impossible to stop the corruption which Brasilians accept in silence. Election votes can be bought locally for the price of a can of beer and a free party.

That doesn't sound too different to party politics in most countries to me.

I remember an election at university for a student council representative that was won with free beer and a party, it was a good party as well

.

Dotty · #10 19-04-2008, 12:37 PM

There was talk today on CNN that maybe this was a political piece of hype from The Lula Party and it will take between 2/3 years to know the real quantity of petrolium at present they actually do not know.Considering Brasil produces petrol,prices are mighty high here and with the Lula PARTY IF THE FIND IS TRUE he will put the price up .Hes not very good at Math.