Dec. 20 (Bloomberg) -- Petroleo Brasileiro SA, the world’s biggest crude producer in ultra-deep waters, estimates its Franco prospect and two other fields off Brazil’s southeastern coast hold about 3.6 billion barrels of commercial reserves.
Franco holds 3.06 billion barrels of oil equivalent, Carioca has 459 million and Sul de Tupi has 128 million, the Rio de Janeiro-based state-run company said in regulatory filings, declaring the fields commercial. The three fields hold “good quality” oil, according to the filings.
The declarations come six years after then-Brazil President Luiz Inacio Lula da Silva announced the discovery of at least 50 billion barrels of oil trapped underneath a layer of salt below the Atlantic seabed. Petrobras is focusing the bulk of its $237 billion five-year business plan on developing the so-called pre-salt area, aiming to more than double crude output by 2020.
Franco is “confirmed as a giant,” Bank of America Corp. analyst Frank McGann and Vicente Falanga Neto said in a report to clients today. The field’s “total potential could be substantially larger, though any additional barrels currently belong to the government.”
Carioca, owned in partnership with BG Group Plc and the Repsol Sinopec Brasil SA venture, is part of a cluster of fields known as the Big Five discoveries. Franco and Sul de Tupi are among six fields that Petrobras is developing after acquiring the rights to produce 5 billion barrels from the government in exchange for shares issued in 2010.
After declaring the reserves commercial, Petrobras and the government must negotiate a revision of the value of the transferred reserves set at $8.51 per barrels of oil equivalent in 2010, McGann and Falanga Neto said. While the Carioca field is smaller than originally expected a few years back, it’s in line with recent expectations, the analysts said.
Petrobras said it suggested to Brazil’s regulatory agency to change Carioca’s name to Lapa, Franco’s to Buzios and Sul de Tupi to Sul de Lula. The new names refer to Portuguese-language names of fish or other types of sea life. Brazilian offshore oil fields must be given new names after they are declared to be commercial.
Carioca is located 270 kilometers (170 miles) from the coast of Sao Paulo state. Franco is 200 kilometers from Rio de Janeiro state and Sul de Tupi is 300 kilometers from Rio.
Petrobras owns 45 percent of Carioca, BG owns 30 percent while the Brazilian joint venture between Spain’s Repsol SA and China Petroleum and Chemical Corp. holds the rest.
The other fields in the group known as Big Five pre-salt discoveries are Lula, Iracema, Iara and Sapinhoa. The group received its name before the discovery of Franco and another field known as Libra, which holds an estimated 8 billion to 12 billion barrels of oil equivalent.
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