Brazil expected to announce “the largest oil discovery in the world this year”

Energy and Mines minister Lobao is expected to make the official announcement on 23 October

Petrobras CEO Maria das Gracas Foster described as ‘simply exceptional’ the latest discovery of hydrocarbons off the coast of the north-eastern state of Sergipe on the Atlantic but declined to give further details of the prospect. Even when the Brazilian administration has abstained from making any announcement the Sergipe government has said “it is the largest oil discovery in the world this year”.

“What we are doing is not releasing numbers because we can’t. We’re making tests and in fact it is a great discovery, an exceptional discovery, a beautiful discovery and Ptrobras needs of great discoveries” said Gracas Foster addressing the annual congress of the World Steel Association, WSA.

Sergipe governor Jackson Barreto anticipated in Aracaju the regional capital that Mines and Energy minister Edison Lobao will be making official de discovery, and further details, on 23 October.

Rumours of the discovery last week saw Petrobras shares climb in Sao Paulo’s stock exchange despite the fact that Moody’s lowered the Brazilian oil giant credit rating because of its mounting debt.

The area offshore the states of Sergipe and Alagoas is part of the oil exploitation chronogram of Petrobras for 2018.

During the WSA conference in Sao Paulo, Graca Foster said that Petrobras objective is to end the year having completed investments equivalent to 50bn dollars, which would represent an additional 5bn over 2012.

Nevertheless the Brazilian state managed company also in implementing a 9bn dollar divesting program which contemplates the closure of 38 offices overseas and the sale of assets and exploration participations in other areas of the world as it recently did in the Gulf of Mexico, Argentina and Uruguay.

“It’s a matter of optimizing costs and simplifying the company’s structure”, said Petrobras CEO.

Apparently Petrobras and its Indian partner IBV Brasil have determined that their SEAL-11 block and adjoining areas about 100 kilometres off the coast contain more than 1 billion barrels of oil. If the find is as large as some expect, it would be the first major offshore discovery outside of the so-called sub-salt region 1,500 kilometres to the south.

Petrobras, the operator of SEAL-11, owns 60% of the block and IBV owns the rest. IBV is a 50-50 joint venture between India’s Bharat Petroleum Corp (BPCL) and Videocon Industries Ltd.