BRAZIL ANNOUNCES DISCOVERY OF MASSIVE OIL RESERVES.
Brazil's state-owned oil company Petroleo Brasileiro S.A. (Petrobras) announced the discovery of 5 billion to 8 billion barrels of oil and natural-gas reserves, the largest discovery worldwide in years. Petrobras studies of the offshore Tupi field and a new discovery nearby showed enough oil to increase national oil reserves by more than half and appeared to show enough petroleum to make Brazil one of the top 10 oil producers in the world, the company announced. One economic analysis showed that Petrobras was among the top five publicly traded companies in the US after the announcement.
Eight billion barrels nearly matches Norway
If the fields have 8 billion barrels to offer, the amount could boost the country's reserves by as much as 62%. The company's shares rose the most in more than eight years on Nov. 9.
The estimate for Tupi was made after drilling a second test well, Petrobras said in a statement on its Web site. Tupi's total estimate would almost match that of Norway's 8.5 billion barrels of proven oil reserves, according to an estimate by BP Plc.
Brazil already had 13 billion barrels of oil and natural-gas equivalent of proven reserves, according to Petrobras, based in Rio de Janeiro. The oil at Tupi, in the offshore Santos Basin, is a light grade, more valuable and cheaper to refine than the heavy crude that dominates Brazilian output.
"This is certainly the biggest oil discovery in deep water" and the largest since Kazakhstan's Kashagan, with at least 12 billion barrels in reserves, was found in 2000, said Matthew Shaw, an analyst at Wood Mackenzie Consultants Ltd. in Edinburgh. The Kazakhstan discovery was the largest in 30 years.
The potential new deposits may raise Brazil's oil reserves from 17th in the world to among the top 10, according to Petrobras. The field will be able to produce as much as 1.2 million barrels of oil a day in 2024, according to Wood Mackenzie estimates. The partners will need to invest about US$8 billion to tap the deposit.
Petrobras plans to begin a pilot project to produce 100,000 bpd in Tupi beginning in 2011.
The Tupi find is just a "tiny" part of a new oil province that Petrobras believes is beneath existing fields, CEO Jose Sergio Gabrielli said Nov. 8.
Lula: "God is Brazilian"
"God is Brazilian," Brazilian President Luiz Inacio Lula da Silva said Nov. 20 in relation to his government's announcement of the massive new offshore oil reserves.
"This discovery...proves that God is Brazilian," he said...
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