Petrobras to Raise Drilling Ante in Santos with 10 Rigs in 2010

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RIO DE JANEIRO (Dow Jones Newswires), Aug. 18, 2009

Brazil's state-run energy giant will ramp up its drilling program in the Santos Basin, increasing efforts to bring the key offshore oil finds onstream as quickly as possible.

Petrobras expects to have 10 drilling rigs operating in the deepwater basin in 2010, up from six rigs currently drilling in the region, CFO Almir Barbassa said Tuesday. The Santos Basin is the site of several discoveries, including Tupi -- the largest discovery in the Western Hemisphere in more than 30 years.

"We're very active in the Santos area, and we're going to increase drilling activity even further," Barbassa said. Barbassa made the comments during a conference call with analysts.

Two rigs will start drilling in the region by the end of 2009, with an additional six rigs expected to be delivered in 2010. Not all of the 2010 deliveries will be headed for the Santos Basin, however, as Petrobras fulfills exploration commitments elsewhere in its massive Brazilian offshore acreage.

The Santos Basin is home to Brazil's subsalt region of recent discoveries. The subsalt oil discoveries were made under a thick layer of salt in the Santos Basin off the coast of Sao Paulo and Rio de Janeiro states. The oil lies under more than 2,000 meters of water and a further 5,000 meters under sand, rock and a shifting layer of salt.

In November 2007, Petrobras estimated recoverable reserves at the Tupi field were between 5 billion and 8 billion barrels of oil equivalent, or BOE. That was the largest discovery in the Americas in more than 30 years.

Three of the six rigs currently active in the Santos Basin were drilling fresh wells, Barbassa said.

The Iracema and Tupi Nordeste were being spudded in the BM-S-11 block, home to the Tupi and Iara discoveries. A separate rig was drilling the Abare prospect in the BM-S-9 block, home to the Guara discovery.

Two other rigs were helping with formation tests at Iara and Guara, which will be the next two subsalt discoveries to undergo long-term well tests. Testing of the Iara well should be completed in 20 days, while the Guara formation test should be concluded in 45 days, Petrobras officials said.

"The tests will help us better understand these reservoirs," Barbassa said.

The Santos Basin's sixth drilling rig was currently doing repair work at the Tupi long-term well test. Petrobras halted the test in July because of problems with a wet Christmas tree, a submarine well-flow control device.

The well test should restart in September, Barbassa said.  

Copyright (c) 2009 Dow Jones & Company, Inc.

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