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Brazil Oil Field Could Be Huge Find

An offshore find by Brazil's state oil company Petrobras in partnership with Repsol-YPF and BG Group may be the world's biggest oil discovery in the past 30 years, the head of the National Petroleum Agency (ANP) said Monday.

Haroldo Lima told reporters the find known as Carioca in the subsalt cluster could contain 33 billion barrels of oil equivalent, five times the recent giant Tupi discovery, further boosting Brazil's prospects as an important world oil province and the source of new crude in the Americas.

Petrobras shares jumped 6.23 percent to 83.50 reais on the news, reversing early losses.

"It could be the world's biggest discovery in the past 30 years, and the world's third-biggest currently active field," Lima told reporters.

He would not say whether the reserve estimate was recoverable or in-place. Petrobras last year put Tupi's recoverable reserves at between 5 billion and 8 billion barrels of oil equivalent, most of it light oil.

The Carioca area lies west of Tupi in the prolific Santos basin, off the coast of Sao Paulo state.

"It's subsalt, and we knew there were big expectations for the subsalt cluster in addition to Tupi. But if this is confirmed, it's really huge," said Sophie Aldebert, associate director with Cambridge Energy Research in Brazil.

"With that size, you'd have plenty of gains of scale that could easily offset the subsalt geological challenges," she added. The challenges include shifting salt clusters that require reinforced piping and producing in deep waters from huge depths under the ocean floor.

Petrobras officials had no immediate comment. Petrobras tested one well at Carioca last year and is drilling another.

Geologists had long voiced a theory that Tupi could have an even bigger neighbor containing light oil or natural gas. If the reserves are confirmed, Brazil could jump into the top 10 countries by reserves, surpassing countries like Nigeria.

Petrobras has also said it saw good prospects for major oil finds in the subsalt areas in the Campos and Espirito Santo basins north of Santos, but it is focusing mainly on Santos at the moment.

Most of Petrobras crude comes from heavy-oil Campos basin fields, but recent subsalt discoveries could make Brazil a major producer of higher quality oil. Analysts say, however, the subsalt development can be very costly and take more time than Petrobras expects.

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