Brazil's state-controlled oil and gas multinational Petrobras announced this Tuesday, July 28, in an official release that it has drilled eleven wells in the promising Santos Basin region, with all of the wells testing positive for oil or natural gas.
The announcement follows earlier press reports from São Paulo financial publication Valor Econômico citing sources from Brazil's national petroleum agency, saying that 32% of wells drilled (9 out of 28) in the Santos and Campos basin has proved dry or commercially non viable.
Valor adds that the drilling global failure rate for the oil industry is in the range of 25 to 30%.
Oil reserves located under a thick layer of salt off Brazil's coast has attracted intense interest from global oil companies since November 2007, when the company announced the Tupi find which together with sister field Iara are estimated to hold recoverable reserves of between 8 billion and 12 billion barrels of oil equivalent.
Petrobras said that from 2006 to the end of 2008 some 30 wells have been drilled in search of sub-salt oil targets in the Santos and Campos basins, with an overall success rate of 87%.
Concerns about the viability of the promising oil province were raised earlier this month with the first high-profile failure in the sub-salt region. Exxon Mobil and Hess Corp. reported the Guarani prospect in the BM-S-22 turned up dry.
Development of the province is expected to be expensive and complicated since the oil is locked in reservoirs at a water depth of more than 2,000 meters and a further 5,000 meters under rocks, sand and salt.
In related news Repsol YPF SA and Petrobras announced they had found evidence of oil and natural gas in an offshore well in Brazil's Santos Basin.
The discovery was made at well 1REPF4SPS in the S-M-789 block at a water depth of 140 meters, the National Petroleum Agency said on its website.
Repsol is the operator of the project with a 40%, Petrobras owns 35% while Vale SA and Woodside Petroleum Ltd. 12.5% each.
It has yet to be determined if the find can be developed commercially.