Petrobras: Latest Santos basin subsalt oil find opens new frontier

2/27/2013

Petrobras: Latest Santos basin subsalt oil find opens new frontier

BY JEFF FICK

RIO DE JANEIRO -- Petrobras said that a new subsalt oil discovery opens a new exploration frontier in the Santos Basin, where billions of barrels of crude have already been discovered.

The first well drilled in the offshore BM-S050 block, dubbed Sagitario, was found to contain high-quality oil, Petrobras said. Petrobras operates the block with a 60% stake. The local unit of BG Group holds 20%, while Repsol Sinopec Brasil retains the remaining 20%.

The discovery is significant because it was made to the west of the cluster of oil discoveries made deep under a thick layer of salt off Brazil's Atlantic Ocean coast in the mid-2000s. The Lula field, which holds estimated recoverable reserves of between 5 Bboe and 8 Bboe and is currently producing about 100,000 boepd, and the Sapinhoa field that started pilot production earlier this month both sit due east of the Sagitario discovery. Sapinhoa is estimated to hold recoverable reserves of 2.1 Bboe.

Petrobras is spending $237 billion through 2016 to develop the subsalt area, with crude oil production from the region expected to jump starting in mid to late 2014. It is counting on the subsalt output to reverse stagnant production in recent years as Petrobras struggles with flagging output at mature fields and maintenance shutdowns at aging offshore platforms.

The company expects to produce about 2.02 MMbopd in 2013, before output is expected to start growing in 2014 as more subsalt fields enter production.

Dow Jones Newswires

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