Pre-Salt to Make Brazil's Reserves World's 9th Biggest

Fields and Basins of Brazil
(Click to Enlarge)

MADRID (Dow Jones Newswires), November 24, 2008

About $400 billion will be needed to develop Brazil's promising pre-salt oil area over a 10-year period, according to a preliminary estimate, Haroldo Lima, the president of Brazil's National Petroleum Agency, or ANP, said Monday.

The estimate is based on calculations by the ANP, Brazil's state-run oil firm Petroleo Brasileiro SA, or Petrobras, and Brazil's government, Lima said. He spoke to Dow Jones Newswires ahead of the Brazil-Spain Investment Forum in Madrid.

Oil found in the area lies usually at water depths of 2,000 meters or more, and then several thousand meters further under layers of salt, rocks and sand, which makes production expensive and challenging.

According to preliminary estimates, the pre-salt could contain between 50 billion and 70 billion barrels of oil, Lima said.

Due to recent discoveries, Brazil's proven oil reserves likely jumped to about 14 billion barrels in 2008 from 12.6 billion barrels in 2007, Lima also said, adding that the 2008 figure still isn't consolidated. The ANP usually gives its annual reserve estimates in January.

Spanish oil company Repsol-YPF, Portugal's Galp Energia SPGS SA, BG Group, ExxonMobil Corp., and Royal Dutch Shell PLC., have significant stakes in Brazil's pre-salt area.

Copyright (c) 2008 Dow Jones & Company, Inc.

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