Repsol YPF SA said an area off the coast of Brazil it’s exploring with partner China Petroleum and Chemical Corp. contains the equivalent of at least 1.25 billion barrels of oil.
The BM-C-33 block of the Campos Basin, where the Repsol Sinopec venture has already drilled three wells, contains at least 700 million barrels of light crude and 3 trillion cubic feet of gas, Repsol said in a filing today. Repsol’s stake in the block is 21 percent. Sinopec, as the Chinese company is known, has 14 percent, Statoil ASA has 35 percent and Petroleo Brasileiro SA has 30 percent.
Repsol has discovered 14 new deposits of oil and gas in Brazilian territory since 2008 as it ramped up exploration work to reverse a decline in reserves. The company’s first Brazilian well, Guara, is due to start pumping next year and output will peak at as much as 270,000 barrels a day.
“Brazilian offshore is one of the areas with the highest hydrocarbon reserves growth in the world,” Repsol said today.
Repsol rose as much as 3.5 percent in Madrid and traded 2.2 percent higher at 13.64 euros at 1:25 p.m. local time. Statoil gained as much as 2.4 percent to 139.80 krone in Oslo.
Repsol is hunting for oil in 31 countries around the world including the U.S., Russia, Venezuela and Algeria. It is drilling exploratory wells in Bolivia, Guyana, Sierra Leone and Alaska. The company plugged wells off the coast of Cuba and abandoned exploration work there after failing to find oil, Repsol said last week.
With its most recent Brazilian well, Pao de Acucar, Repsol tapped a column of oil 500 meters tall beneath the Atlantic seabed -- that’s more than twice the height of the skyscrapers opposite the company’s Madrid headquarters. The well lies beneath 2,800 meters of water some 120 miles off the coast within the BM-C-33 block.
“We’re very happy to have made another giant discovery,” Statoil’s Executive Vice President for Exploration Tim Dodson said in an interview today. “Pao came as a very positive surprise. The reservoir quality, the light oil and the column height, all of those three things are moving things in a positive direction.”
New discoveries at Repsol overtook production in 2010 and last year the excess rose to 62 percent from 28 percent the year earlier. The company plans to increase production pumping oil and gas from new deposits in Spain, Peru, Bolivia and Venezuela over the next three years.
Deutsche Bank AG analyst Mark Bloomfield this month forecast output may increase by 9 percent a year through 2016, reaching about 500,000 barrels a day compared with about 300,000 a day last year. He said production may reach 581,000 barrels a day by 2020.