OSLO - Statoil ASA said Thursday it and its partners had substantially upgraded estimates for the Brazilian Campos basin pre-salt oil and gas discoveries, to a total 1.24 billion barrels of oil equivalent, and the Norwegian oil giant said this also increased its optimism for its geologically similar acreage in Angola.
Statoil said the companies had updated their estimates of the Brazilian discoveries Seat, Gavea and Pao de Acucar to a total of 700 million barrels of oil and three trillion cubic feet of natural gas--which is equal to 540 million barrels of oil equivalent--after previously estimating the discoveries as "high impact," defined as more than 250 million barrels of oil equivalent, or a share of 100 million barrels for Statoil alone.
Pre-salt, a geological formation off the African and Brazilian coast, is expected to contain huge amounts of oil and gas that could contribute billions of new barrels to global reserves and help Statoil fulfill its goal of increasing its daily international production to 1.1 million barrels by 2020, from about 600,000 barrels currently.
But these resources are buried under a thick layer of salt at huge water depths, which means wells are much more complicated and risky to drill than conventional offshore wells.
The Brazilian discoveries are "more than one billion barrels combined, so it's really significant," Statoil's vice president of exploration Tim Dodson told reporters in Oslo.
Operator Repsol Sinopec, a joint venture between Spain's Repsol YPF SA and China Petroleum & Chemical Corp., holds 35% in the pre-salt block BM-C-33, Petrobras holds 30% and Statoil 35%. Production is shared according to each company's stake.
He said the companies are learning new things about their pre-salt acreage all the time.
"The reservoir type and the oil type is different. The oil is light and good, and we are very encouraged by that," Dodson told Dow Jones Newswires, adding that the presence of gas makes production somewhat more complicated than if it had only been oil.
Dodson said that at around 2,800 meters water depth the discoveries are fairly complicated to drill, but that the reservoirs are better than expected.
"It is a special type of reservoir. It doesn't necessarily mean it is difficult to produce, but it is difficult to predict and to know where the reservoir is. It isn't a conventional sandstone reservoir like we have in Norway," he said.
The original Brazilian pre-salt discoveries were made in the Santos basin to the south, he explained, while Statoil and partners' more recent discoveries are situated in the Campos basin, further from the Brazilian coast. The Pao de Acucar discovery is 195 kilometers off Rio de Janeiro.
"We see a lot of upside potential in this part of the Campos basin. Unfortunately, that isn't readily available because there is no license rounds planned for this basin," he said, adding that Brazilian authorities has no plans to open the area for the time being.
Dodson said that his optimism about the potential of Statoil's pre-salt acreage in the Angolan Kwanza basin had also been strengthened by the Brazilian discoveries.
"This juxtaposes on the Angolan acreages," Dodson said, adding that the news flow the last months has been positive towards Statoil's Angolan position. "We are nicely flanked now by these big, light oil, pre-salt discoveries, so that's a good sign."
Copyright (c) 2012 Dow Jones & Company, Inc.
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