Petroleo Brasileiro SA, Brazil’s state-controlled oil producer, said it found signs of oil at a deepwater well in the Sergipe Basin after reporting “large accumulations” of crude in the same area on Oct. 27.
Petrobras, as the Rio de Janeiro-based producer is known, made the discovery at the SEAL-M-495 block at a depth of 1,393 meters (4,570 feet), the National Petroleum Agency, or ANP, said on its website. Petrobras hasn’t determined if the find can be developed commercially.
The company is exploring Sergipe as it expands into new areas of the Atlantic Ocean in an effort to double production over the next decade. Sergipe, located off Brazil’s northern coast, produced 63,000 barrels a day in October, or 2.6 percent of the country’s total output, the ANP said on its website.
“They already have platforms in that area, so if they find oil near those platforms lifting costs will be very cheap,” said Andres Kikuchi, an analyst at Link Investimentos in Sao Paulo, who rates Petrobras “market perform.”
Sergipe is closer to shore than the offshore Santos and Espirito Santo basins, making it cheaper to build pipelines to transport the oil to refineries onshore, he said.
Peter Millard in Rio de Janeiro at Pmillard1@bloomberg.net