Petrobras Resumes Subsalt Drilling Near Guara, Carioca Finds

RIO DE JANEIRO (Dow Jones Newswires), Jan. 29, 2009

Brazilian state-run energy giant Petroleo Brasileiro resumed drilling Wednesday in a key subsalt exploration block in the promising Santos Basin, according to the country's National Petroleum Agency.

The Ocean Clipper rig started drilling in the Santos Basin's BM-S-9 block, ANP data showed. Two previous pioneer wells in the BM-S-9 block yielded the promising Guara and Carioca discoveries.

The drill rig will target a total depth of 5,592 meters, operating at a water depth of 2,140 meters, ANP data showed.

Petrobras is lead operator of the block with a 45% stake. BG Group has a 30% interest in the block, while Spain's Repsol YPF holds a 25% share.

The BM-S-9 block is part of a group of four blocks that many industry experts and government officials believe contains a massive geological structure that could hold more than 30 billion barrels of oil -- and possibly much more. The structure crosses the BM-S-8, BM-S-9, BM-S-21 and BM-S-22.

In 2008, nearly all of the test wells drilled in the region showed signs of oil or natural gas, resulting in the announcement of such finds as Bem-te-vi, Caramba, Carioca and Guara.

The last block in the area to be tested, BM-S-22, also showed promising signs. Last week, ExxonMobil notified the ANP that a test well, dubbed Azulao, showed traces of oil. ExxonMobil started the drilling program in October.

Separately, drilling also started at the BM-BAR-3 offshore block in the Barreirinhas Basin. U.S. independent Devon Energy has contracted the Deepwater Discovery rig to start drilling. The rig will target a depth of 4,825 meters in water 2,335 meters deep.

Devon holds a 100% stake in the exploration block.

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



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