Petrobras Completes Rights-Area Well, Makes Ceara Find

RIO DE JANEIRO - Brazilian state-run energy giant Petroleo Brasileiro SA, or Petrobras, said Friday it had completed drilling a third offshore well in one of the areas transferred to the company from the government in 2010.

Petrobras said a 93-meter column of oil was discovered in the well drilled in the Sul de Guara area, south of the Sapinhoa pre-salt oil field that was declared commercial late last year. The company made a preliminary disclosure about the oil discovery in June. The reservoir tapped by the well contained high-quality light oil rated 27 degrees on the American Petroleum Institute's grading scale.

The transfer-rights area is an important part of Petrobras's development of the Santos Basin pre-salt region, a cluster of oil discoveries made under a thick layer of salt more than four miles below the ocean's surface. As part of the company's 2010 share offer and capitalization, the government gave Petrobras the right to produce up to five billion barrels of crude oil from highly prospective areas close to the original pre-salt finds.

The Sul de Guara well was part of the obligatory-exploration program, which should be concluded by September 2014, Petrobras said.

In addition, Petrobras said late Tuesday that it discovered oil in a deep-water offshore well drilled in the Ceara Basin off Brazil's northeast coast. The Pecem well was drilled in the BM-CE-2 block, which Petrobras operates with a 60% stake. The local unit of U.K. oil major BP PLC, BP Energy do Brasil Ltda., holds the remaining 40%.

Drilling at the well will continue to a targeted depth of 5,500 meters, Petrobras said.

Copyright (c) 2012 Dow Jones & Company, Inc.


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Dr. Gary Reid | Aug. 6, 2012
This is significant in the scope of the worlds oil reserves. Now to delineate and determine the true reservoir volume. Should be interesting to see what the real volumetrics are determined.

L. F. Bensimon | Aug. 6, 2012
These so-called "government transfer" of public areas to Petrobras has been a major violation of constitutional rights in the country as well as a blow to the local petroleum laws democratically instituted in 98. The Brazilian law clearly states that any hydrocarbon reserves belong to the country and are overseen by the democratically established national petroleum agency ANP. Any such reserves may be exploited by oil companies, Petrobras included, ONLY through concession agreements executed between ANP and the oil company, which are awarded as a result of public tenders held in accordance with the Brazilian oil law. In NO instance may such a hydrocarbon reserve be simply handed over to Petrobras, or any other oil company for that matter, without being publicly tendered. These "transfer of rights" were a major blow to the democratic institutions in the country and a statement of how arbitrary the local government can be.

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