More Oil Discovered Onshore Zzzz

Bloomberg: Petrobras Finds More Oil in Onshore Espirito Santo Basin Block.

April 29 (Bloomberg) -- Petroleo Brasileiro SA, Brazil’s state-controlled oil company, found more evidence of oil in an onshore block in the country’s Espirito Santo Basin, the Brazilian petroleum regulator said.

The discovery was made at well 4BRSA727ES in the ES-T-372 block, the National Petroleum Agency said on its Web site. The Corrego Cedro Norte field in this block was declared a commercial find in a filing dated Oct. 21, according to the agency’s Web site.

Petrobras Oil Hunter Fights To Keep Finds For Brazil

Bloomberg: Petrobras Oil Hunter Fights to Keep Finds for Brazil.

Dec. 19 (Bloomberg) -- Guilherme Estrella found an undersea lake of oil that may transform Brazil’s economy forever. Now, the exploration chief for Petroleo Brasileiro SA is at the center of a debate over who will profit from it.

At stake is how much of Brazil’s newfound riches will be controlled by the state and how much will end up in the pockets of Exxon Mobil Corp., Royal Dutch Shell Plc and other oil companies hungry for new sources of crude. Estrella wants to make Western oil companies little more than hired help for government-controlled Petrobras, as his company is known.

“Petrobras is our space program,” ...

Few people have been involved in the discovery of more oil than Estrella, said Gerrard Demaison, a former Chevron Corp. geologist who is president of Capitola, California-based Petroscience2000.

“This guy’s work was prophetic and essential for finding the oil Brazil has today and making Petrobras what it is,” Demaison, 76, said in a telephone interview. “I would put him alongside the great petroleum geologists of the last century.” ...

“If he’d stick to geology, he’d be fine, but I’m afraid his political ideas and those of his allies are going to damage the industry and put the country’s energy future at risk,” said Amaral, now a senator. “We need investment.”

Petrobras: Jupiter Is "Tupi-Sized"

Another 8 billion barrels: Galp Rises; Petrobras Confirms `Large' Deposit at Jupiter Find.

Sept. 25 (Bloomberg) -- Galp Energia SGPS SA, Portugal's biggest oil company, climbed as much as 3.6 percent in Lisbon trading after Petroleo Brasileiro SA said tests confirmed a ``large'' deposit of natural gas and light crude oil in the Brazilian offshore well known as Jupiter.

Lisbon-based Galp advanced as much as 45.5 cents to 13.255 euros, and traded at 13.01 euros as of 9:58 a.m. in the Portuguese capital. The stock has dropped 29 percent this year for a market value of 10.8 billion euros ($16 billion).

Petrobras, as Brazil's state-controlled oil company is known, last night said it will be able to provide a more- detailed estimate of oil reserves in the 1-BRSA-559A-RJS well after further analysis. Petrobras said Jan. 21 that the Jupiter deposit appeared to be ``Tupi-sized,'' a reference to a nearby prospect that it estimates may have 8 billion barrels of oil.

Abiotic Deep Origin of Hydrocarbons

I missed this last month and wasn't sure what Anaconda was talking about until now: GEP-13 Abiotic deep origin of hydrocarbons: Myth or reality?.

About combination genesis of hydrocarbons in different regions of Glob (Case Lesser Caucasus and Arabian Plate)
Albert Harutyunyan, Sargis Grigoryan

About the deep source of the hydrocarbon's reduced systems and origin of the Romashkin oil field
Rimma Gottikh, Bogdan Pisotskiy , Irina Plotnikova

Carbon in ancient serpentinite-hosted hydrothermal systems: Constraints from the northern Apennine ophiolites (Italy) and the Iberian margin
Esther Schwarzenbach

Deep origin of oil: Evidences from inorganic geochemistry of oil
Kirill Ivanov, Yuri Fedorov, Yuri Erokhin, Olga Pogromskaya, Yuri Ronkin, Irina Plotnikova

Fractured zone of the upper crust as a source of hydrocarbons entry
Inna Balanyuk, Anatoly Dmitrievsky, Tatiana Akivis

High production of hydrogen and abiogenic hydrocarbons by serpentinization of ultramafic rocks between 12°N and 40°N on the mid-Atlantic Ridge- Methane plumes and hot fluid geochemistry
Jean Luc Charlou, Jean Pierre Donval, Cecile Konn, Yves Fouquet, Philippe Jean-Baptiste

How tectonically driven upward movement of deep abiotic hydrocarbons makes conventional oil and gas fields
Alexander Kitchka

Hydrocarbons in the Ilimaussaq magmatic intrusion, Greenland, exhibit both abiogenic and biogenic signature
Troels Laier, Hans Peter Nytoft

Hydrocarbons in the rift zones, evidence from Iceland and Israel
Yuri Galant, Alfred Geptner, Yuri Pikovskii

New models of oil/gas forming in light of unique data of the ultra deep wells
Yuri Galant

Organic compound occurrence in fluids from ultramafic-hosted hydrothermal systems of the Mid-Atlantic ridge: a consequence of H2 production?
Cecile Konn, Jean-Luc Charlou, Jean-Pierre Donval, Nils Holm, Frank Dehairs, Bouillon Steven

Polygenesis of oil and gas
Anatoly Dmitrievskiy

Precambrian crystalline basement of the Volgo-Kama anticline and the origin of oil fields
Rimma Gottikh, Renat Muslimov, Bogdan Pisotskiy, Irina Plotnikova

Quantification of the rate of methane production by serpentinization
Alasdair Skelton, Patrick Crill, Fredrik Arghe, Bob Whitmarsh, Hemin Koyi

The modern theory of abiotic deep genesis of hydrocarbons: A history of the history
Vladimir Kutcherov

Trassers of superdeep fluids in petroliferous reservoirs
Alexander Lukin

As Anaconda noted, this website is a Brazilian government website and indicates that Petrobras (PBR) is well aware of abiotic exploration principles. Furthermore, it was sponsored by StatoilHydro (STO).

What A Difference A Day Makes

Yesterday we had Petrobras begging for mercy: Petrobras president sees funding risk from crisis.

RIO DE JANEIRO, Sept 18 (Reuters) - The crisis hitting global markets could make it more difficult for Brazil oil giant Petrobras (PBR) to fund its ambitious plans to tap vast deep-water oil reserves, the company's president said on Thursday.

"Imagine the volume of finances we need. It will be difficult to raise resources if this little country in the north keeps falling," Jose Sergio Gabrielli said, in an apparent reference to the United States.

"You can imagine the problems."

Gabrielli made the remarks in a speech at the end of the four-day Rio Oil and Gas conference, dominated by the state-owned firm's massive new offshore oil discoveries that could catapult Brazil into the world's top 10 producers.

The firm needs to spend hundreds of billions of dollars in the coming years to tap the oil, which lies up to 7 km (4.3 miles) below a thick layer of salt.

The financial crisis could squeeze funding sources for Petrobras and its suppliers of crucial equipment, such as the deep-sea oil rigs that can cost more than $500 million each to build.

Petrobras has leased about 80 percent of the world's deepest-drilling offshore rigs and plans to double its rigs in deep and ultra-deep water to 63 by 2017. Twenty-eight of the new rigs are to be built in Brazil.

The crisis has "consequences that are not yet fully realized in financing this market," Gabrielli added.

Today we have BRIC countries leading the strongest rally in 20 years: Russia, Brazil Lead Record Emerging Market Gain; Bonds Rally.

Sept. 19 (Bloomberg) -- Emerging-market stocks surged the most in 20 years and currencies and bonds soared after central banks pumped cash into credit-markets, shoring up confidence and luring investors back to riskier assets.

Russia, China and Brazil led the rally as every emerging stock market but Pakistan gained. Russia's Micex Index rose the most ever as President Dmitry Medvedev pledged $20 billion to end the nation's worst financial crisis since the 1998 default. China's CSI 300 Index rose a record 9.3 percent. Latin American currencies surged, led by a 6.3 percent jump in the Colombian peso. Emerging-market bonds rallied the most since 2001.

Why was Pakistan the only emerging market not to gain? Because they are the only totalitarian country besides the U.S.S.A. authoritarian enough to institute a shortsale ban.

Here is a chart sent to me by industry sources:

Petrobras Breaks Production Record

Petrobras' Brazil oil output hits record in Aug.

SAO PAULO, Sept 16 (Reuters) - Petrobras' (PBR) domestic monthly oil output rose to a record high in August after production was raised at two wells and another platform entered into service, Brazil's state-run energy firm said on Tuesday.

Petrobras, which accounts for nearly all crude production and refining in Latin America's largest country, said it pumped an average of 1.89 million barrels per day last month, up 1 percent from 1.87 million bpd in July and above the average of 1.79 million bpd for all of 2007.

Petrobras said August's output made it a record month. The firm's crude output has risen more or less steadily since 2000, and is now expected to soar after its discovery of deep subsalt reserves late last year of 5 billion to 8 billion barrels of light crude deep beneath the ocean floor in the Santos basin.

Petrobras sees pre-salt output 1.1 mln bpd in 2017.

RIO DE JANEIRO, Sept 16 (Reuters) - Brazil oil giant Petrobras(PBR) expects to be producing 1.126 million barrels a day of oil equivalent from its new "pre-salt" fields by 2017, the head of exploration and production for the fields said on Tuesday.

"In 2017, it (pre-salt) will have a significant mark on production with eight complete platforms of 120,000 bpd and three planned pilots of 100,000 bpd," Jose Formigli told reporters at the Rio Oil and Gas conference.

Petrobras has invested $1 billion, drilling 20 wells into the sub-salt layer of Brazil's coast since 2005 and has encountered large quantities of high-grade light oil and natural gas. Analysts estimate the sub-salt reserves could contain up to 80 billion barrels of oil, catapulting Brazil into the top 10 oil producers.

Last year, Petrobras produced 1.79 million bpd. It expects an average annual output growth of over 7 percent through 2012.

Formigli said the expected pre-salt production from the pre-salt cluster in the Santos basin would be included in the firm's business plan for 2009 to 2020 which is due to be released in October.

Formigli added that Petrobras was not concerned about the recent sharp fall in world oil prices since the company's plans for the pre-salt production were based on a price of $35 per barrel.

Iara: 4 Billion Barrels

Petrobras Oil Reserves Likely to Swell on Iara Field.

Sept. 11 (Bloomberg) -- Petroleo Brasileiro SA, Brazil's state-controlled oil company, said its Iara offshore field contains 3 billion to 4 billion barrels of oil, its second giant find in a year and enough to supply the country for five years.

The assessment released yesterday is the first estimate of recoverable oil from the discovery announced Aug. 11. Petrobras, as the Rio de Janeiro-based company is known, said in January its Jupiter field in the same region contained gas quantities similar to its Tupi area, the largest oil find in the Americas since 1976.

Iara is in the Santos Basin to the north of Tupi, a 5 billion- to 8 billion-barrel field announced in November. If confirmed, Iara and Tupi, which sit in non-adjacent parts of the same exploration block, could almost double Brazil's 12.6 billion barrels of proven oil reserves, according to BP Plc. Petrobras preferred stock gained the most in three weeks.

``It's still a huge field and bigger than almost anything around,'' Ted Harper, senior research analyst with Frost Investment Advisors in Houston, said by telephone. The company manages the equivalent of $2 billion of stocks and bonds, including Petrobras, Harper said.

Iara is operated and 65 percent owned by Petrobras.

Brazil May Have 70 Billion Barrels Near Tupi

Brazil May Have 70 Billion Barrels of Oil Near Tupi.

Sept. 5 (Bloomberg) -- Brazil has between 30 billion and 70 billion barrels of oil in its so-called pre-salt fields near the Tupi discovery off the coast of Rio de Janeiro state, said Julio Bueno, the state's economic affairs secretary.

The oil estimate refers to fields previously discovered by Petroleo Brasileiro SA, Brazil's state-controlled oil company, BG Group Plc and other companies in the Santos Basin, Bueno said today in an interview with Bloomberg Television in London.

``We think that in the areas that Petrobras and other companies have already discovered we have 30 billion to 70 billion,'' said Bueno, a former Petrobras executive. ``It's not an easy task to say how much you have, but it's a good amount to think about.''

About $600 billion will be needed to develop the pre-salt resources, an amount that will require involvement from both Brazilian and non-Brazilian oil companies, Bueno said. The Tupi field may have as much as 8 billion barrels of recoverable oil, Petrobras said in November, making it the largest oil discovery in the Americas since 1976.

Bueno favors retaining Brazil's existing rules and regulations governing oil exploration and believes a national debate over how to spend revenue from the new fields will not end with restrictions on foreign investment.

``The law is very nice and running well,'' he said. ``We need foreign investment and technology. We need an open system.''

Rio de Janeiro-state's position as Brazil's main oil- producing region and its governor Sergio Cabral's close relationship with Brazilian President Luiz Inacio Lula da Silva will help ensure that major changes to the country's oil lease system aren't made, Bueno said.

Brazil currently leases its oil rights to private companies at auctions and the companies can sell the oil they produce. The discovery of the new fields has initiated a discussion about how to increase the government's share of oil revenue and whether the state should take a bigger role in managing oil development.

I just averaged down.

Brazil Risk: Much Ado About Nothing

Given that Petrobras (PBR) is now George Soros's single biggest investment, and given that Repsol began drilling the Santos Basin today, it seems to me that the Bolshevik rhetoric from Brazil's Socialists is much ado about nothing and merely hollow words without meaning. Does anyone honestly think Brazil wants to be the next Venezuela?

Sept. 3 (Bloomberg) -- Repsol YPF SA, Spain's largest oil company, started drilling in two projects it operates in the Santos basin offshore Brazil.

The company owns 40 percent of the BM-S-48 and BM-S-55 projects, while Brazil's Petroleo Brasileiro SA holds a 35 percent stake, Madrid-based Repsol said today in a regulatory filing. Exploration will be carried out over the next two years and involve drilling two or three wells.

``The Santos basin in Brazil is one of the zones with greatest exploration potential in the world,'' Repsol said.

Brazil's ``pre-salt'' offshore region may contain about 50 billion barrels of oil, according to Peter Wells, a director at U.K. research company Neftex Petroleum Consultants Ltd. Repsol has stakes in 23 blocks in Brazil's offshore Santos, Campos and Espirito Santo basins, and operates 11 of those projects.

The company has pledged to almost triple profit by 2012 and is trying to increase exploration in countries including Russia and Brazil as it cuts reliance on Argentina. Chairman Antonio Brufau on July 1 said the company will triple investments for developing offshore crude oil deposits in Brazil's Santos Basin to at least $1.5 billion.

Repsol hired Transocean Inc.'s Sovereign Explorer platform for the work, which will start at the Panoramix well in the BM- S-48 area at a water depth of 170 meters (558 feet). The platform can drill as deep as 8,902 meters.

Repsol also plans to drill two appraisal wells in the next year at the Carioca discovery in the Santos Basin, Chief Operating Officer Miguel Martinez said July 31.

Brazil Devolves Into Socialist Circus

The Socialists in Brazil are doing their best to scare foreign investment away from Brazil so that Brazilians are never allowed to participate in the global economy. Hopefully Brazil won't join the ranks of Russia and Venezuela: Brazil Pumps First Pre-Salt Oil Amid Windfall Debate.

Sept. 2 (Bloomberg) -- Brazilian President Luiz Inacio Lula da Silva boarded an oil platform today to celebrate the first output from offshore deposits he's counting on to speed development and end poverty.

The oil is the first trickle from the so-called pre-salt region containing as much as 50 billion barrels of oil worth $6 trillion at current prices. Located in area is Tupi, the largest discovery in the Americas since 1976. Petroleo Brasileiro SA, the state-controlled oil company, is tapping the well about 560 kilometers (350 miles) northeast of Rio de Janeiro.

Although full-scale production is still years away, Lula's allies in congress are already writing bills to spend the windfall on programs ranging from education to nuclear submarines. Other lawmakers want to revamp Brazil's oil industry to exert more state control and limit foreign involvement. As the fight for cash intensifies, analysts and opposition lawmakers say it may scare off investment.

``We are cooking the omelets with eggs that the hen hasn't laid,'' said congressman Luiz Paulo Vellozo, who heads an opposition panel discussing pre-salt. ``We should not be discussing how to spend the money, but how to get the oil out.'' ...

Petrobras has the most at stake in the regulatory fight. The company has evolved into the world's 11th-largest company with a market value of more than $205 billion, about half the value of Exxon Mobil Corp., the world's the world's largest company, under the decade-old system of oil rights auctions.

``The paradox is that the discovery of pre-salt is the successful culmination of the same model now under threat,'' Carlos Langoni, a former central bank president, said at an Aug. 29 conference in Rio de Janeiro to discuss the new oil laws.

Since July 9, when the price of oil reached a record, the company's shares have tumbled 16 percent to 33.55 reais at 9:10 a.m. in Sao Paulo, almost double the decline in both the Sao Paulo stock market and the New York Stock Exchange Energy Index. The shares are now trading at the lowest levels since before the discovery of Tupi in November.

Soros Loads Up Petrobras

Petrobras: Buy and Sit Tight Like Soros.

As reported at Bloomberg.com, George Soros purchased an $811 million stake in Petroleo Brasileiro SA (PBR), (better known as Petrobras) in Q2. The Brazilian oil company is now the largest holding in his fund, amounting to 22 percent of the total $3.68 billion of stocks and American depositary receipts held by Soros Fund Management LLC. Of course, crude oil has taken a dive in the last month, helping to push Petrobras down 28 percent since his purchase and costing Soros $235 million. I guess we would all like to be in a position to lose nearly a quarter billion dollars and still be "OK". Then again, if Soros holds tight, he could end up doing well.

While the timing for Soros may not be perfect for this trade, a number of other people are also betting on Petrobras. As quoted by Ricardo Kobayashi from UBS Pactual SA: "Petrobras has something that other oil companies don't have: oil - lots of it and they're going to find more. If you can buy now and hang on, if you have the staying power, it's great.''

As written in a previous post , estimates have the Tupi-area fields in Brazil costing between $200-$240 billion to develop, in part due to deepwater rigs causing $600,000 a day to rent, forcing Petrobras to look for capital. Yet the cost might eventually be worth it given that the offshore fields are expected to hold up to 50 billion barrels. Petrobras has already leased approximately 80% of the deepest-drilling offshore rigs (see post). The company is also buying new rigs and production platforms.

If oil prices stabilize, companies to consider would be Transocean (RIG), Nobel (NE), and Nabors (NBR), each of which have sold off with lower crude prices, but each of which are also near some key support levels. For longer-term investment, some capital-intensive E&P oil companies such as Exxon Mobil (XOM) should do well, even without direct investment. Of course, this all requires crude oil to stabilize, probably stay over $100 a barrel, and potentially continue its march higher. If not, you may be experiencing the short-term returns of Soros, and not necessarily the longer-term ones.

And I'm not even going to make any Communist jokes about Soros or Lula.

Petrobras Q2 Results

Brazil's Petrobras Posts Record Profit.

SAO PAULO -(Dow Jones)- Aided by higher oil and oil-product prices and a break on federal taxes, Brazilian state-run energy giant Petrobras (PBR) on Monday posted a new all-time record for quarterly profits.

Second-quarter profits rose 29% from a year ago to 8.78 billion reals ($5.41 billion). Second quarter revenues were up 30% from a year ago to BRL54.57 billion. The company released its quarterly figures in BR GAAP terms.

In a statement, the company, also known as Petroleo Brasileiro SA, attributed the rise in profits and revenues to higher international and domestic oil and oil-product prices, among other factors.

Petrobras Could Be Worth $90 - Barron's

Petrobras could rise 25 percent - Barron's

NEW YORK, June 29 (Reuters) - Shares of Petrobras(PBR) could rise another 25 percent if the Brazilian oil company's recently discovered offshore wells become as profitable as some expect, financial weekly Barron's reported.

The state-controlled company may be sitting on top of what may be the largest oil field find in the Western Hemisphere in 30 years, the newspaper said in its June 30 edition.

The company's U.S. listed shares, which closed at $69.23 on Friday, could rise as high as $90 within a year, Barron's said. (Reporting by Emily Chasan; Editing by Braden Reddall)

Brazil Oil Reserves Will at Least Triple, Lula Says

June 26 (Bloomberg) -- President Luiz Inacio Lula da Silva said Brazil will at least triple its oil reserves by exploring a new offshore area that includes the Western Hemisphere's largest discovery since 1976.

``This is very promising for Brazil,'' Lula, 62, said in a Bloomberg Television interview today at the presidential palace in Brasilia. ``We have to take advantage of this oil to develop the country.''

A tripling of proved reserves from 12.6 billion barrels would move Brazil into the world's top 10 nations in oil supplies, according to estimates from London-based BP Plc.

Also see AAPG Hedberg Conference: Hydrocarbon Habitat of Volcanic Rifted Passive Margins.

Transocean Signs Billion Dollar Petrobras Deal

Newbuild Drillship to Have a 10-Year Drilling Contract With an Optional 10-Year Extension

HOUSTON, June 23, 2008 (PRIME NEWSWIRE) -- Transocean Inc. (NYSE:RIG) today announced that its subsidiaries have reached an agreement with subsidiaries of Petrobras and Mitsui to acquire a newbuild ultra-deepwater drillship under a capital lease contract. In conjunction with the capital lease contract, subsidiaries of Petrobras and Transocean have entered into a 10-year drilling contract covering worldwide operations with an option by Petrobras to extend the term of the drilling contract by up to an additional 10 years.

The capital lease contract has a 20-year term, after which Transocean will have the right and obligation to acquire the drillship for $1. Total capital costs to be incurred by Petrobras and Mitsui for the construction of the drillship are estimated to be $750 million, including $65 million of capitalized interest.

The 10-year drilling contract is expected to commence in the third quarter of 2009 following shipyard construction, sea trials, mobilization and customer acceptance. The drilling contract commencement is contingent on vendor performance and other factors. At least 12 months prior to the expiration of the initial 10-year term, Petrobras may elect to extend the term of the drilling contract by up to an additional 10 years at a mutually agreed operating dayrate which would then apply to the extension period.

Contract revenues over the initial 10-year contract term are estimated to be $1.68 billion, including monthly bonuses which could be as high as 12 percent of dayrate revenue each month. Estimated contract revenues are before taxes, which will be paid by Transocean and fully reimbursed by Petrobras. Additionally if the rig is operating in a jurisdiction where the company has a valid dual activity patent, an additional 5 percent royalty would be paid to Transocean. Estimated contract revenues represent the maximum amount of revenue that may be earned in the firm 10-year contract period, excluding revenues for reimbursed taxes, royalties, mobilization, demobilization and cost escalation.

Plentiful New Oil

Excellent article at Seeking Alpha by Jason Schwarz: The 'Peak Oil' Myth: New Oil Is Plentiful

The data is becoming conclusive that peak oil is a myth. High oil prices (USO) (OIL) are doing their job as oil exploration is flush with new finds:

1. An offshore find by Brazilian state oil company Petrobras (PBR) in partnership with BG Group (BRGYY.PK) and Repsol-YPF may be the world's biggest discovery in 30 years, the head of the National Petroleum Agency said. A deep-water exploration area could contain as much as 33 billion barrels of oil, an amount that would nearly triple Brazil's reserves and make the offshore bloc the world's third-largest known oil reserve. "This would lay to rest some of the peak oil pronouncements that we were out of oil, that we weren't going to find any more and that we have to change our way of life," said Roger Read, an energy analyst and managing director at New York-based investment bank Natixis Bleichroeder Inc.

2. A trio of oil companies led by Chevron Corp. (CVX) has tapped a petroleum pool deep beneath the Gulf of Mexico that could boost U.S. reserves by more than 50 percent. A test well indicates it could be the biggest new domestic oil discovery since Alaska's Prudhoe Bay a generation ago. Chevron estimated the 300-square-mile region where its test well sits could hold up to 15 billion barrels of oil and natural gas

3. Kosmos Energy says its oil field at West Cape Three Points is the largest discovery in deep water West Africa and potentially the largest single field discovery in the region.

4. A new oil discovery has been made by Statoil (STO) in the Ragnarrock prospect near the Sleipner area in the North Sea. "It is encouraging that Statoil has made an oil discovery in a little-explored exploration model that is close to our North Sea infrastructure," says Frode Fasteland, acting exploration manager for the North Sea.

5. Shell (RDS.A) is currently analyzing and evaluating the well data of their own find in the Gulf of mexico to determine next steps. This find is rumored to be capable of producing 100 billion barrels. Operating in ultra-deep waters of the Gulf of Mexico, the Perdido spar will float on the surface in nearly 8,000 ft of water and is capable of producing as much as 130,000 barrels of oil equivalent per day.

...

The peak oil theory is a money making scam put out by the speculators looking for high commodity returns in a challenging market environment. Most of the above mentioned finds have occurred in the last two years alone. I didn't even mention the untapped Alaskan oil fields or the recent Danish and Australian finds. In the long term, crude prices will find stability at historic norms because there is no supply problem. How much longer will investors ignore these new oil finds?

Petrobras Finds Light Oil In Shallow Water

Petrobras makes new, "important" light oil find

RIO DE JANEIRO, May 29 (Reuters) - Brazilian state oil company Petrobras on Thursday announced a new "important" find of light oil 36 API grade in the shallow waters of the Santos basin off Sao Paulo state's coast.

Unlike a slew of recent discoveries in the subsalt cluster at great depths at sea, the find was made above the layer of salt about 6,560 feet (2,000 meters) under the ocean floor and and at a water depth of just 770 feet (235 meters), which should make future output easier.

Petrobras is the only company working the BMS-40 block, where it expects to start drilling a second well next month, it said in a statement. It provided no reserve estimates.

The find, located about 170 miles (275 km) south of the coastal city of Santos, was confirmed via a formation test, which showed a high flow rate for the type of reservoir and oil found and an estimated per-well production potential of more than 12,000 barrels per day, the company said.

"The discovery is of great importance because of its potential for light oil production and the reserve's location in shallow waters," it added.

Speaking in El Salvador earlier on Thursday, Brazilian President Luiz Inacio Lula da Silva said his country "has just discovered big oil blocks with a great potential to turn it into one of the three top countries by oil reserves."

Bounties Of The Deep

Bounties Of The Deep.

A multinational consortium has struck oil in ultra-deep waters in the Gulf of Mexico.

The companies said an exploration well called Stones #3 had hit reservoirs of natural gas and oil in 7,500 feet of water and at a total depth of 29,400 feet.

Bullish On Petrobras

Growing reserves at 6% annually. Peak oil?

Zacks: New Reserves for Petrobras

We keep our Buy recommendation on Petroleo Brasileiro SA (Petrobras) (NYSE: PBR) on the Brazilian state oil company's positive production-growth profile and the improving outlook for its downstream business. The recent discovery of the Tupi field opens up a new range of possibilities for the company in the long run.

Moreover, the continued high price of oil and the company's large inventory of development projects are also positive. Finally, Petrobras' first quarter results were better than expected, and the outlook for the following quarters remains encouraging.

Most of Petrobras' domestic operations are located in the offshore Campos Basin, which is Brazil's largest oil region and is one of the most prolific oil and gas areas in South America. Even without considering some important new discoveries, the company is expected to grow annual volumes by about 6 percent over the next few years. The company has laid out a realistic, but aggressive, plan to grow production volumes over the next few years by competitively developing its extensive, proved undeveloped reserve base in the Campos Basin and in select international markets, using its considerable expertise in deepwater oil exploration.

Until recent quarters, PBR used to trade at a discount due to the difficult political environment in Latin America. However, after the discovery of the new oil field at Tupi, with a reserve potential of over 60 billion BOE [barrels of oil equivalent], PBR trades at 19.7x our 2008 earnings estimate, at a considerable premium over the industry mean of 11.4x.

In the near term, the stock should benefit from the positive outlook for the domestic oil industry and the recent upgrade of Brazil to investment grade by S&P. We expect PBR's P/E multiple to expand to around 21.5x our 2008 earnings and set a target price of $79.50 on the stock.

Petrobras Strikes Oil (Again)

Petrobras, which recently passed GE in market cap to become the world's 5th largest company and plans to order 40 ultra-deepwater rigs at a cost of $30 billion, struck oil again the other day: Petrobras, Shell, Galp Find Oil in Pre-Salt Block.

May 21 (Bloomberg) -- Petroleo Brasileiro SA, Brazil's state-controlled oil company, said it struck oil in the BM-S-8 block of the coast of Sao Paulo state.

Petrobras, in a joint venture with Royal Dutch Shell Plc and Galp Energia SGPS SA, found reserves in well drilled through the seabed and a layer of salt beneath seas 2.1 kilometers (1.3 miles) deep, according to a statement posted on the Brazilian securities regulator's Web site.

``The potential for the area is great and this well helps to show the whole pre-salt region has a great future,'' said Lucas Brendler, analyst at Geracao Futuro Investimentos SA, a Porto Alegre, Brazil-based investment bank which manages 7.6 billion reais ($4.6 billion) of stocks, including about of 1.3 billion reais of Petrobras, its largest holding. ``Still, this is only incremental data, and we'll need more news, more facts, to have a better idea of the actual size of the deposit.''

Petrobras will need to drill a second well in the Santos basin area, about 250 kilometers south of Rio de Janeiro, before the company can get a full idea of the size of the field.

As of May 14, Petrobras's well had drilled through 6,975 meters of ocean floor, according to Brazil's petroleum regulator, known as ANP.

This Oil Move Is For Real

Jim Cramer: This Oil Move Is for Real

It doesn't stop. I hear about less gasoline use. I hear about big alternatives to energy. I hear about mass transit. They are meaningless to oil. Far more important to oil is the Petrobras decision to try to glom onto 80% of the world's rigs. That's a killer. No one else can drill deep if they do that. Plus, the cost of drilling is monumental now. Meanwhile, in the political landscape, we worry about the Strategic Petroleum Reserve, not drilling offshore where there is lots of oil and gas. We worry about taxing oil companies' windfalls, not encouraging them to drill year-round. And the result? Look at your screen. There is still, even at these prices, no marginal oil available. As an aside, why don't all the pundits ask the speculators to sell us some? They are sure to replace it with drilling.

LOL.