Brazil's Petrobras makes ultra-deepwater find in subsalt area


Brazil's Petrobras makes ultra-deepwater find in subsalt area


RIO DE JANEIRO -- Brazilian state-run oil company Petrobras said that it had discovered oil in an ultra-deepwater area the company obtained from the government, a development that could heighten interest in a planned auction of similar offshore exploration acreage set for later this year.

Petrobras said that the Florim well discovered oil under a thick layer of salt that has yielded some of the largest oil discoveries in the past 30 years. Florim lies in exploration acreage given to Petrobras as part of the government's 2010 capitalization of the company, which included a nearly $70 billion share sale and rights to produce 5 billion bbl of crude oil from the so-called "rights transfer" areas.

Global oil producers are expected to line up for a shot to buy into one of the world's most-promising oil frontiers later this year, when Brazil plans to hold its first-ever auction of subsalt exploration acreage under new production sharing agreements Nov. 28-29. The subsalt auction is part of a series of exploration-concession auctions planned by the country in 2013 after a nearly five-year hiatus.

Discoveries in the rights transfer areas, meanwhile, are also expected to help Petrobras quickly boost crude oil production in the subsalt because they are situated relatively close to other fields already under development by the company. Petrobras has struggled with flagging oil production over the past year amid heavy maintenance shutdowns at aging offshore platforms and output declines at mature fields.

Florim was the sixth well drilled in the rights transfer acreage, Petrobras said.

Petrobras plans to spend $237 billion through 2016, with much of the cash earmarked for development of the subsalt. The subsalt region off the coasts of Rio de Janeiro and Sao Paulo states is estimated to hold as much as 100 billion bbl of crude oil. While some of the subsalt region has already been auctioned off previously, a majority of the exploration acreage remains under government control and will be sold off in new bidding rounds under a production-sharing regime.

Dow Jones Newswires


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