ExxonMobil Notifies ANP of Offshore Brazil Oil Discovery

RIO DE JANEIRO (Dow Jones Newswires), Jan. 21, 2009

The Brazilian unit of global oil titan ExxonMobil notified Brazil's National Petroleum Agency that it has discovered oil in the BM-S-22 offshore block.

In a routine filing with the ANP, Exxon said that it had discovered traces of oil in a well drilled in the Santos Basin's BM-S-22 block. The block was the last to be drilled in a promising region that could hold deposits of up to 33 billion barrels of oil equivalent, or BOE.

ExxonMobil holds a 40% operating stake in the block. Hess (HES) also has a 40% share, while Brazilian state-run energy giant Petroleo Brasileiro (PBR) holds the remaining 20% stake.

Oil companies operating in Brazil must inform the ANP of indications of oil, gas or hydrocarbons in any exploratory well within 72 hours. The disclosures are routine, and do not indicate commercial viability.

The BM-S-22 notification is significant because it's the final piece of what could be the largest oil discovery in the past 30 years. The BM-S-22 block is part of a cluster of four blocks that contain a gigantic geographical structure, which industry experts and analysts believe could contain several discoveries the size of Petrobras' Tupi find.

The structure crosses the BM-S-8, BM-S-9, BM-S-21 and BM-S-22 blocks.

In April 2008, the head of the ANP caused a stir when he said reserves in the area around the Carioca find in the BM-S-9 block could be 33 billion barrels of oil equivalent. Petrobras officials, however, declined to confirm the estimate and said that further drilling was needed before any estimate on volumes could be made.

Petrobras is the leading stakeholder in many of the exploration blocks in Brazil's promising offshore subsalt region. While many exploration wells have shown signs of oil, the only reserve estimate has been for the Tupi and Iara finds.

In November 2007, Petrobras estimated that recoverable reserves at Tupi could contain between 5 billion and 8 billion BOE. A separate portion of the same BM-S-11 block also holds the Iara find, which holds estimated reserves of between 3 billion and 4 billion BOE.  

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

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