Brazil Cuts Estimate for ‘Gigantic’ Oil Field After Drilling
Brazil’s oil regulator reduced its estimate for the Libra field after conducting a drilling program at the site, director Magda Chambriard said.
The agency, known as the ANP, said the field likely holds 5 billion barrels and may contain as few as 4.5 billion barrels, Chambriard said today at the Latin Oil Week conference in Rio de Janeiro. That’s down from a previous estimate of as many as 15 billion barrels.
The agency said in October that the field may hold “gigantic” reserves almost twice as large as those of Tupi, which has since been renamed Lula and was the biggest discovery in the Americas in the past three decades. Brazil is counting on large discoveries in the so-called pre-salt region offshore to fund social programs aimed at reducing poverty in South America’s largest economy.
“Libra, before drilling a well, was statistically calculated as an opportunity of 3.7 to 15 billion barrels,” Chambriard told reporters. “We drilled, we reduced uncertainty, and now the most probable volume is 5 billion barrels. It could be 4.5 billion, it could be 6 billion.”
The regulator is waiting for lawmakers to approve new legislation on oil royalties before auctioning Libra and other exploration areas in the pre-salt region in deep waters of the Atlantic Ocean, Chambriard said. The government’s first auction will include the Libra field, she said.
Biggest Share Sale
State-controlled Petroleo Brasileiro SA (PETR4) will operate all new concessions in the pre-salt under new regulations. The company raised about $70 billion in September in the world’s biggest share sale ever as it seeks cash to fund exploration.
Brazil plans to auction 174 oil exploration areas on land and off the coast of northern and northeastern Brazil in the third quarter of this year.
“We’re expecting all the large companies,” Chambriard said about possible bidders for the blocks. “We’re including larger exploration blocks at the request of the companies.”
The exploration licenses to be awarded in so-called Round 11 will be bigger than in previous auctions because there hasn’t been much exploration in the region, she said.
To contact the reporter on this story: Peter Millard in Rio de Janeiro at pmillard1@bloomberg.net
To contact the editor responsible for this story: Dale Crofts at dcrofts@bloomberg.net
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