Dec. 11 (Bloomberg) -- Petroleo Brasileiro SA's Tupi offshore field in Brazil, which may contain at much as 8 billion barrels of oil and natural gas, may be eclipsed by an even larger find nearby, UBS AG said.

A geological formation beneath a 2-mile (3.2-kilometer) layer of salt in Brazil's Santos offshore basin, is larger than Tupi and, if oil bearing, may contain ``significantly more'' oil than Tupi, Gustavo Gattass, an analyst with UBS Pactual in Rio de Janeiro, said in a note to clients.

Petrobras, as Brazil's state-controlled oil company is known, Exxon Mobil Corp., Royal Dutch Shell Plc, Repsol YPF SA, BG Group Plc, Hess Corp. and Galp Energia SGPS all have concessions in the neighboring area, Gattass said, referring to the formation as ``Sugar Loaf.''

``Through crude measuring it appears that Sugar Loaf's area is about five times largest than that of Tupi,'' Gattass said, citing former Petrobras geologists and studies of Tupi and Sugar Loaf. ``We expect the first announcements of a find over the next two months and test results between four and seven months.''

Petrobras announced its Tupi find on Nov. 8. That prompted Brazil's national energy council to remove exploration concessions in areas similar to Tupi from a Nov. 27 auction to study the implications of the discovery. The oil lies beneath as much as 10 kilometers of ocean and rock off the coast of Rio de Janeiro.

BG Group and Galp are partners with Petrobras in Tupi.

To contact the reporter on this story: Jeb Blount in Rio de Janeiro at jblount@bloomberg.net

Last Updated: December 11, 2007 14:04 EST