Petrobras Shares Up on Hopes for More Oil Discoveries

SAO PAULO Dec 14, 2007 (Dow Jones Newswires)

Shares in Brazil's state-run oil company, Petroleo Brasileiro SA (PBR), or Petrobras, were up in mid-afternoon trading Friday on hopes for new oil discoveries near the large Tupi site off Brazil's southeastern coast, traders said.

Petrobras preferred shares were up 1.32% to 83.39 reals ($46.58) at 1600 GMT, while the Ibovespa stock index was up 0.59%.

Earlier this week, UBS Bank said in a research report that oil potential in the area surrounding Tupi is "potentially five times the size of Tupi."

In November, Petrobras said that its ultra-deep Tupi field in Brazil's Santos Basin could contain reserves of between 5 billion and 8 billion barrels of oil equivalent, making it the world's biggest oil discovery in seven years.

"While much has been asked and said about Tupi, we believe that few have looked at what we see as the most relevant issue here. If Tupi really holds 5 million to 8 billion barrels, we wonder how much another structure South of it might hold. In subsurface maps it looks much larger than Tupi itself, and it is only now being drilled," said UBS.

In response to a request by the Brazilian Securities Commission, or CVM, to comment on the UBS report, Petrobras said that it has made an evaluation of the potential in the region and reaffirmed major volumes of oil and gas. However, the Petrobras comments included no other details about the region's conditions or potential.

"The wells that reached the pre-salt level and were tested by Petrobras have shown, so far, a high productivity level for light oil and natural gas," said Petrobras.

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