Thursday, October 10, 2013

Brazil: Petrobras Finds "Exceptional" Crude Discovery Off the Coast of Sergipe

According to The Latin American Tribune, the new "exceptionally" crude discovery close to shore off the coast of the northeastern state of Sergipe was announced by Petrobras CEO María das Graças Silva Foster on Tuesday (October 8), although details were not provided.  

“What we’re not doing is revealing numbers because we can’t. We’re conducting tests, and this is in fact a big discovery, an exceptional discovery. Petrobras needs big discoveries,” Foster said at the World Steel Association’s annual conference.

The Sergipe state government, meanwhile, called the find the “largest discovery in the world” in 2013, and Gov. Jackson Barreto told reporters in Aracaju, the state capital, that Mines and Energy Minister Edison Lobao would make an official detailed announcement on October 23.

The new crude find is located closer to shore and could be cheaper to develop than other offshore, “pre-salt” reserves located further south.

The pre-salt frontier, a series of ultra-deep oil fields that were discovered in recent years and stretch for some 800 kilometers (500 miles) off the coasts of the southeastern states of Espirito Santo, Rio de Janeiro, São Paulo and Santa Catarina, could dramatically increase Brazil’s proven-reserve tally and transform the country into a major crude exporter.

COMMENT: Nevertheless, accessing the find, so-named because they are located under water, rocks and a shifting layer of salt at depths of up to 7,000 meters (22,950 feet) below the surface of the Atlantic, will be very costly and pose an enormous technical challenge.

Separately, nine oil companies met a Monday (October 7) deadline to deposit financial guarantees ahead of a scheduled October 21 auction of the country’s largest pre-salt field, Libra, which authorities say could eventually produce up to 1 million barrels per day.

Libra will be the first pre-salt field put up for auction under a new production-sharing regime in which the government is the owner of the reserves.

Bidders who have offered financial commitments to the new find include the China National Petroleum Corporation, Anglo-Dutch Shell, Colombia’s Ecopetrol, Petrobras, France’s Total, the China National Offshore Oil Corporation and the Spanish-Chinese consortium Repsol/Sinopec.

US-owned ExxonMobil and Chevron and Britain’s BP and BG Group decided not to participate in the auction.