Brazil’s Pre-Salt Oilfields: Larger Than Initially Thought

As recently reported by The Financial Times, Brazil’s newly discovered “pre-salt” oilfields may contain more than 100bn barrels, Haroldo Lima, head of the industry regulatory.  As the article notes:

“…If so, the new fields would propel Brazil up the world league table of oil producing nations. Brazil currently has reserves of about 12.6bn barrels (or 14.4bn barrels of oil equivalent if natural gas is included), according to a statistical review produced by BP of the UK, a standard industry reference.

That compares with 79.4bn barrels of oil in Russia, for example, or 101.5bn in Kuwait, according to BP.

“Dimensions are so big that we still don’t have a good vision of what this means for Brazil,” Mr Lima told reporters in Rio de Janeiro.

The pre-salt oilfields – as their name suggests – are trapped beneath a layer of salt under about 7,000 metres of sea water and rock and are among the most inaccessible on earth.

The geological formation of which they are part is about 800 km long and 200 km wide, running up the southern Brazilian coast from the Santos Basin, about 200 km offshore.

The deposits were discovered in 2007 and since then the government has suspended its annual auctions of concessions of geographical “blocks”, in which oil companies accept exploratory risk in return for rights over any oil and gas they may discover.

Every well so far sunk into the pre-salt fields has struck oil – a hit rate of 100 per cent compared with about 15 per cent common in new areas in Brazil. Ministers have likened selling concessions in pre-salt fields to selling winning lottery tickets and the government is preparing a new regulatory framework for the pre-salt fields.

But 10 concessions in the Santos Basin had been sold before the government realised the potential of the new fields.

The areas under concession form a minority of the total pre-salt area, suggesting Mr Lima’s estimate may be very conservative.”

This entry was posted on Saturday, November 8th, 2008 at 5:30 am and is filed under Brazil.  You can follow any responses to this entry through the RSS 2.0 feed.  Both comments and pings are currently closed. 

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