Processing Magazine

Brazil evaluates size of big oil find

April 21, 2008
The Associated Press is reporting that the chief of Brazil''s state-run oil company said recently it would take up to three months to evaluate the size of what could be the country''s largest-ever oil find.

Sergio Gabrielli, chief executive of Petroleo Brasileiro SA, declined to confirm comments made by another energy official earlier this week that as many as 33 billion barrels could be contained in the deep-water Carioca field off Rio de Janeiro.

He said there should be some results in "two to three months."

If those remarks prove correct, the find would nearly triple Brazil''s oil reserves. Petroleo Brasileiro, known as Petrobras, is the lead oil company exploring the field, while Britain''s BG Group and Spain''s Repsol YPF also have stakes.

Stocks in the three companies rose sharply on Monday, after National Petroleum Agency President Haroldo Lima said the Carioca field contained five times the oil previously supposed and could hold the third largest reserves in the world.

Lima backed off his words on Tuesday, and his agency, which regulates Brazil''s oil industry, issued a statement clarifying that his comments had been based on a recent report in World Oil magazine and another from Brazil''s Agencia Estado news agency in November.

Mines and Energy Minister Edison Lobao recently warned against premature speculation.

Brazil''s current proven oil reserves are 11.8 billion barrels, according to the U.S. Energy Department, more than half the 21.8 billion barrels held by the U.S.

The South American country became self-sufficient in oil production in 2006, but produces and exports mostly heavy crude, which must be mixed with imported light crude oil to make the refined products that the country needs.