Petrobras Boosts BC-60 Probable Reserves to 2.1bn Barrels

Brazil's federal energy company Petrobras has boosted probable reserves on the BC-60 exploration block to 2.1 billion barrels of crude following the completion of three more wells, the company said Wednesday.

Petrobras owns 100% of BC-60, which now has probable reserves equivalent to about 21% of Petrobras's global proven reserves, which stood at 8.9 billion barrels at the end of 2002. Petrobras said the six discoveries on BC-60 confirm the presence of a "new oil province" in the north of Campos Basin, located offshore southern Espírito Santo state. Wells 1-ESS-119, 1-ESS-122 and 1-ESS-125 were drilled in water depths of between 1,473m and 1,535m. Initial estimates from these three wells indicate reserves of 500 million barrels (mb) of oil, added to the 630mb announced in May at well 1-ESS-121 and 970mb in the existing fields of Jubarte and Cachalote, all located within BC-60.

A spokesperson for Petrobras said the quality of oil has not yet been confirmed, but said crude in adjacent discoveries has been heavy, averaging 20 degrees API.

Petrobras said it is working to evaluate the productivity of the four wells. The company declared commerciality on Jubarte and Cachalote in December 2002, and has started a long-term production test on Jubarte. The company is working on development plans for both. "These probable reserves won't necessarily be transformed into proven reserves. In general, Petrobras says 70% of that volume becomes proven," said Fabiana Fantoni, oil analyst at Sao Paulo consulting firm Tendencias Consultoria, adding that an even lower percentage is actually recoverable.

"The most important impact of this announcement is that it attracts new investments," Fantoni told BNamericas. At the end of 2001 and early 2002, foreign investors were starting to talk about leaving the country, but a string of subsequent discoveries by Petrobras is helping to re-ignite some interest, she said. The Petrobras announcements are significant both in terms of the volume but also because some of them, mainly in the south of the country, contain lighter crude. "It demonstrates that the country has more oil to be discovered, and it is not always heavy crude - that is often not commercial," Fantoni said Petrobras does hold the best exploration acreage in Brazil, she admitted, but pointed out that the possibility of finding oil in new areas remains and there is space for the majors. However, the future of the oil industry is more likely to be in the hands of the independents willing to exploit smaller, mature fields, she said.

The discoveries also help boost the ratio of discoveries relative to investments, which will make Brazil more competitive against its main rivals in West Africa, where the ratios are higher, Fantoni said, adding that the government could help by cutting the tax burden on offshore exploration.

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