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Petrobras Surges on 33 Billion-Barrel Field Estimate (Update4)
2008-04-14 16:16 (New York) By Carlos Caminada and Joe Carroll
April 14 (Bloomberg) — Petroleo Brasileiro SA’s stock rose
almost 6 percent after the head of Brazil’s oil agency said the
offshore Carioca prospect may hold the equivalent of 33 billion
barrels of crude, which would make it the world’s third-largest
field.
The estimate for the field off Brazil’s southeastern coast
has yet to be confirmed by Petrobras, as the Rio de Janeiro-
based company is known. Bruno Positiga, a spokesman for
Petrobras, said the company is still studying the find.
Only Saudi Arabia’s Ghawar and Kuwait’s Burgan fields are
bigger. Ghawar holds an estimated 75 billion to 83 billion
barrels of crude; Burgan has as much as 72 billion. Mexico’s
Cantarell field in the Gulf of Mexico has 18 billion barrels of
recoverable reserves, said Dick Gibson, a geologist who advises
oil and natural-gas producers.
“If all of those barrels are recoverable, that’s a very
significant find,” said Gibson, president of Butte, Montana-
based Gibson Consulting. “That whole area off the coast of
Brazil is becoming a new oil province.”
Petrobras shares rose 5.9 percent to 83.13 reais in Sao
Paulo trading. Earlier the stock climbed as much as 7.6 percent.
The rise in common and preferred shares added 9.2 percent to the
company’s market valuation, increasing it to 421.9 billion reais
($249.7 billion).
The Carioca field, also known as BM-S-9, is located beneath
a layer of salt in the deepwater Santos Basin off Brazil’s
southeastern coast, where Petrobras in November announced the
discovery of the 8 billion-barrel Tupi field.
With 33 billion barrels of oil, Carioca would be large
enough to supply every refinery in the U.S. for six years,
according to U.S. Energy Department figures.No Official Information
Haroldo Lima, director of Brazil’s National Oil Agency,
discussed the reserves at a seminar in Rio de Janeiro and said
no official information is available yet. Lima’s comments were
confirmed by Fernando Manso, a spokesman for the agency, and
were reported earlier by Folha de S. Paulo.
Petrobras is the fourth-most valuable company in the
Western Hemisphere, behind Exxon Mobil Corp., General Electric
Co. and Microsoft Corp., according to data compiled by
Bloomberg.
The field is 45 percent-controlled by Petrobras. DCC Plc’s
British Gas LP Gas Ltd. holds a 30 percent stake and Repsol SA
controls 25 percent. Repsol’s U.S. depositary receipts surged as
much as 21 percent to $44.85, the stock’s largest daily gain.
New York-based Hess Corp., which owns stakes in offshore
prospects near Carioca, rose as much as 12 percent to $103.55,
the biggest increase since 1981. The stock closed 9.1 higher at
$101.19.May Be Biggest
The Carioca field may become Petrobras’ biggest and it may
“significantly” increase the company’s future production, said
Eduardo Roche, a fund manager at Rio de Janeiro-based Modal
Asset Management.
“The potential for this field is gigantic,” said Roche,
who helps manage about 1 billion reais in bonds and stocks,
including Petrobras shares, at Modal. “Petrobras is among a
handful of companies that have been able to renew its reserves.
Its capacity to increase future output is absurd.”
Brazil is home to South America’s second-largest oil
reserves, behind Venezuela, according to London-based BP Plc.
“We haven’t seen any discoveries that large in decades
because we’ve punched enough holes in the Earth that we already
know where most of the big fields are,” said Gibson, who has
been working in the oil industry since 1975.
Petrobras recently created a division to coordinate all
exploration projects off the southeast coast, given its
potentially large reserves.
BG Group Plc on Feb. 7 raised its estimate of reserves in
the Tupi field to the equivalent of 12 billion to 30 billion
barrels of oil. Majority shareholder Petrobras estimates Tupi
holds as much as 8 billion barrels of recoverable oil and
natural-gas reserves. Tupi was the largest discovery since
Kazakhastan’s Kashagan field, which has 12 billion barrels of
recoverable reserves. -
While there is no official confirmations yet – Petrobras Carioca offshore field may contain 33B barrels crude making it 3rd largest world and over 2X size of Brazils recent upgraded Tupi field 12-30 B barrels crude (~8 B recoverable).
It will significantly reduce the amount of import crude Brazil is going to need (Sorry Chavez – this 33B would supply every refinery with crude for 6 years for comparison)!
Petrobras now owns Pasadena (Crown) Coking Refinery & has been slated to receive some of the heavy offshore Brazil crude. And crude supply from this new Brazil offshore field would give Petrobras a distinct advantage over competitors for purchase of Valero’s Aruba refinery now up for sale. Additionally it is going to make it hard for PDVSA/ Chavez to negotiate one-sided terms on the new northern Petrobras Refinery in construction that is JV / linked to new Venezuelan Upgrader for crude half supply.
Regards
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