New ultra-deep pre-salt offshore find confirms Brazil an oil giant

30th Saturday, October 2010 - 05:16 UTC Full article

The Libra prospect reserve is estimate in at least 7.9 billion barrels

Brazil’s oil industry regulator announced Friday that a recent ultra-deep offshore find is estimated to hold between 3.7 billion and 15 billion barrels of oil equivalent, which could make it the largest crude accumulation in the country’s pre-salt region and the biggest discovery in the Western Hemisphere in more than three decades.

The most probable estimate for the reserves at the Libra prospect, discovered earlier this year, is 7.9 billion barrels, the National Petroleum Agency, or ANP, said in a statement.

“It’s important to stress that the Libra prospect alone could hold recoverable oil volumes that exceed Brazil’s current proven reserves (14 billion barrels)” the ANP said.

If the most optimistic scenario for Libra is confirmed, Brazil’s proven oil reserves could climb to 29 billion barrels, making it among the world’s top 10 oil nations.

The new prospect is located in the so-called pre-salt cluster, so-named because the estimated 80 billion barrels of oil equivalent that area may contain are located deep below the ocean floor under a layer of salt up to 2 kilometres thick.

However the pre-salt deposits –located in a 160,000-sq.-kilometer area – pose enormous technical challenges but, if successfully developed, could transform Brazil into a major oil power.

The reserve estimate for Libra was made by the Gaffney, Cline & Associates energy consulting firm, the ANP said, adding that that field will significantly add to the state’s holdings because it has not been awarded in concession to any company.

According to the ANP, the 2-ANP-2A-RJS exploratory well was drilled at a spot in the Santos Basin some 183 kilometress off the coast of Rio de Janeiro state and at a water depth of 1,964 meters.

“To date, (drilling) at the Libra well has reached a depth of 5,410 meters, with 22 meters drilled in the pre-salt. The final projected depth, of close to 6,500 meters, is to be achieved at the beginning of December,” the ANP said.

The agency added that it arranged for an exploratory well to be drilled at Libra to boost knowledge about the pre-salt’s potential and that there still is no timeline for the start of production.

Under rules governing the pre-salt, exploration rights to Libra and other yet-to-be-awarded fields in that oil frontier are to be auctioned off to the highest bidder, although state-controlled oil company Petrobras must be the operator and have a stake in the project.

Recoverable oil volumes at Libra could even surpass those of Tupi, which is also located in the pre-salt and is estimated to hold between 5 billion and 8 billion barrels of oil equivalent.

Tupi, discovered in October 2006, has been touted as the biggest oil find since Mexico’s Cantarell in 1976.

Commercial production began on Thursday at Tupi, which is part of the BM-S-11 concession area that is held by a consortium led and operated by Petrobras with a 65% stake. The other partners in the block are Britain’s BG Group, with a 25% and Portugal’s Galp Energia, 10%.