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Brazil’s Petrobras Finds Large Gas Reserve off Espí­rito Santo Coast

Petrobras gas refinery in Brazil

Petrobras gas refinery in Brazil Petrobras, the Brazilian state-controlled oil giant, announced yesterday, May 9, the discovery of more natural gas reserves in EspÀ­rito Santo Basin, in Brazil's Southeast. The discovery was through well 6-ESS-168, which is still being drilled by the company.

In the statement announcing the discovery, Petrobras informs that on reaching the depth of 3,378 meters, sandy reserves saturated with gas were found, with a depth of approximately 130 meters.

Petrobras points out, however, that the importance of the discovery of these new reserves, located in the north of Camarupim Field, is due to the confirmation of the large depth of the gas reserves – "which should result in an increase in recoverable volumes of gas in the area".

The new reserves are located on the coast of the southeastern Brazilian state of Espí­rito Santo, in exploratory concession BM-ES-5 and are being drilled approximately 37 kilometers away from the shore, at a depth of 763 meters.

Information supplied by the organization shows that the block is operated by Petrobras, with a 65% share, in partnership with American company El Paso, which has the remaining 35% share.

"Preliminary results confirm that the reserves extend further north in Camarupim Field, whose commercial capacity was declared at the end of 2006", according to the statement.

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  • Show Comments (18)

  • Steve

    To: JoÀƒ£o da Silva and ConceiÀƒ§Àƒ£o
    I liked the chat of both of you. I am American (born in Auckland, New Zealand-of all places) but have lived in this beautiful country (Brasil) for some 35 years and really believe that Brasil is going to grow alot over the next years and finally has achieved being a giant that finally wakes up -there is no country (in my opinion) that can compare to BrasilÀ‚´s capacity of growth etc.

    Steve

  • João da Silva

    [quote]The theory was that Brasil had the closest culture of any country to the American South and that we would
    benefit from learning about it.[/quote]

    The theory is still true. Brasil is really an upside version of the U.S.!
    [quote]Of course, the politically correct crowd soon fired my professor and put an end to any objective approach to studying your country. The focus is now of course on poverty
    and race relations.
    [/quote]

    The politically correct crowd really wants to maintain the status quo.Never mind it.As for the race relations, I am really color blind. I truly and honestly believe that the brain power is color blind too.

  • conceicao

    Joao, I just stumbled into a sort of Brasilian studies program in college and have always read most anything about Brasil that I have run across since. Brasilians are always amazed that the number of course
    offerings in the history department were, first, U.S., second, British, and third, Brasilian. The theory was that Brasil had the closest culture of any country to the American South and that we would
    benefit from learning about it. Of course, the politically correct crowd soon fired my professor and put an end to any objective approach to studying your country. The focus is now of course on poverty
    and race relations.

  • João da Silva

    [quote]As for a strategic planning minister, I remember being taught in college that the advantage
    Brasil had going forward was well-placed U.S.-trained technocrats leading government ministries under the direction of Delfim Netto [/quote]

    I am more of a fan of Roberto Campos. Delfim did a great job in his first term as a Minister.Delfim during his second term under Gen.Figuereido, wanted to be a politician,forgetting that he was a pure technocrat .Delfim did screw the Middle Class and we are still paying the bill for all the mistakes he made.

    [quote] Probably the only way to get real reform
    done would be the Pinochet method where the reformers don’t have to deal with the politicians, but this of course is not a realistic or desirable alternative.
    [/quote]

    We really dont need Pinochets in our country. We do need strong leadership and right thinking ministers who are capable of giving good advices to Lula. Lula, if convinced, will be able to sell the plans to the Brazilians. btw, Unger and Furlan are good acquisitions.

    Did you go to college in Brazil?. You seem to know so much about our country.

  • conceicao

    It is amazing to see the progress that the country has made at the macro level through the efforts of a largely independent central bank under the direction of world-class business people like
    Meirelles and Fragia and then contrast the macro progress with the goings on of the elected politicians. As for a strategic planning minister, I remember being taught in college that the advantage
    Brasil had going forward was well-placed U.S.-trained technocrats leading government ministries under the direction of Delfim Netto. Then everything went to hell. Probably the only way to get real reform
    done would be the Pinochet method where the reformers don’t have to deal with the politicians, but this of course is not a realistic or desirable alternative.

  • João da Silva

    To:ConceÀƒ§Àƒ£o
    [quote]I am in the Southern U.S. [/quote]

    I rememberyou saying that you live in the Southern U.S. But I thought you were traveling overseas,because of the time of your postings as it is always ahead of ours.

    My forecast is that in the next 4 years,we are going to see changes in the structure of Petrobras as well as in the Government owned banks. Right now,I dont see how these are going to help lift a large majority of the Brazilians out of poverty or going to creat job opportunities for fresh graduates.I think that we need a long term growth strategy for our country. One positve recent development is that a new minsiter for strategic planning has been appointed.I wonder if you read about him. He is a Brazilian who is a professor of Law at Harvard. I am cheering that he will bring introduce some fresh ideas at the government level.

  • conceicao

    Joao, neither Portugal nor England, though I give credit to both these countries for having the gumption to put the money on the table for Scolari. I am in the Southern U.S.

  • João da Silva

    To:ConceÀƒ§Àƒ£o
    [quote] The only losers from such a plan would be the permanent bureaucracy which now may very well include the Petrobras work force.[/quote]

    You put it in a succict and more elegant way ,the way I think. The problem is that the work force thinks that Lula is doing a great favor. I have seen this movie before with respect to Telebras.

    Where are you right now ConceiÀƒ§Àƒ£o, in England or Portugal?

  • conceicao

    $500 million is an enormous pension add for any company in any economy – an amazing number and the traditional Petrobras pension plan could not possibly have been underfunded given the recent
    enormous run-ups in Brasilian stocks and bonds. Looking at it another way, is not $500 million fully 10% of the federal budget for the Bolsa Familia that provides aid to 45 million Brasilians? Guess the
    pensionistas in Brasilia just acquired a lot of solid allies at Petrobras – or should we start to call it Pemexbras. Brasil would be much better off if the government’s Petrobras stock were put into a trust to
    fund the Bolsa Familia – the numbers would work out about right – with the government forever giving up the right to influence – other than through taxation – either Petrobras or the Bolsa Familia trust
    thus created. The only losers from such a plan would be the permanent bureaucracy which now may very well include the Petrobras work force.

  • João da Silva

    To:ConceÀƒ§Àƒ£o
    [quote]I would appreciate some help on the details, but was surprised to see the huge drop in Petrobras earnings for the first quarter [/quote]

    To understand this, you have to study the rise and fall of TELEBRAS.It has a long history. I am afraid that Petrobras and Banco do Brasil are going the sameway as that of TELEBRAS.

    The idea is to completely suffocate the well run state owned companies,by not giving any decision making powers to the professionals who manage them and prove that they are not economically viable. Then sell them for a song ,of course financed by BNDES to private companies. To Hell with the consumers. In effect, we the honest Brazilian Tax payers are paying for this and who cares?

  • conceicao

    I would appreciate some help on the details, but was surprised to see the huge drop in Petrobras earnings for the first quarter – down 38% from 6.68 billion reals a year earlier to 4.13 billion reals.
    Part of the shortfall apparently was due to a one billion-plus real pension contribution, with the rest being blamed on lower oil prices and increased production cost. In contrast, Exxon Mobil’s earnings
    were up in the quarter. What is going on? $2 billion a quarter in profits is not nearly enough to establish and maintain a position in the global top tier of oil companies. And, these numbers do not appear to
    include any hit from the proposed Petrobras capital expenditures tied to the announced Brasil / Japan ethanol export initiative. For Brasil to prosper and the greatest number of Brasilians be lifted up
    from poverty in the shortest time, companies like Petrobras and Rio Doce will be needed to reinvest enormous cash flows into high return domestic petro and mineral projects. Instead, as usual – please correct me
    if I am wrong in seeing a pattern here – cushy pensions seem to be the highest cultural priority. The U.S. ADRs are still above 100, but I am shocked by the $2 billion profit number.

  • João da Silva

    To:ConceiÀƒ§Àƒ£o
    [quote] And, how does the
    opposition expect to win the next election by tacitly participating in all of this? [/quote]

    Is there a real opposition? Just think before you answer this question.

  • conceicao

    This kind of feather-bedding would be the surest way to destroy economic competitiveness. However, it certainly would not be surprising given the explosion of profits at Petrobras and the banks.

    The manipulation of gasoline prices at the pump is just so crazy as it substitutes the judgment of a bureaucrat – really probably only one guy who is trying to balance electoral prospects with hits to
    tax and dividend revenue and Petrobras’ share price and reputation – for that of the market. Brasil’s debt just got upgraded to one notch below investment grade and the government took the opportunity
    to sell sovereign debt at well over a full point in interest rate below recent offerings. Why undercut all of this macro progress on international markets for such pettiness? And, how does the
    opposition expect to win the next election by tacitly participating in all of this? Where would domestic interest rates be without this nonsense?

  • João da Silva

    To:ConceÀƒ§Àƒ£o/The latest news to confirm what we were discussing
    [quote]E eu, que sou distraÀƒ­do, mal infomado e burro, gostaria de saber como que o Banco do Brasil, que acaba de anunciar um enorme enxugamento, prometendo demitir algo como 11 mil funcionÀƒ¡rios[/quote]

    I am repruduzing a part of the article written by a local columnist. I dont know if you understand Portuguese. He says that Banco do Brasil has just announced a plan to fire 11,000 employees!

    I am sure the Government will get rid of 11,000 to be replaced by 22,000 of its cronies!

    The game is afoot

  • João da Silva

    To:ConceiÀƒ§Àƒ£o
    [quote] The three main areas of government interference traditionally have been in pricing, contracting and personnel policies[/quote]

    [quote] As of
    April, ’06, both the CEO and head of exploration and development were both PT party members as was the predecessor CEO.
    [/quote]

    Thanks for the reply.Incredible it may sound, I expected you to express my thoughts in words and it apprears that you are on the same wave length as I am.I dont know if were following the reelection campaign, last year. In the state where we live, the price of gasoline came to 2.7 Reais/Liter. Then in the months of September and October, it came down almost to 2 Reais! (of course one had to buy it by paying cash). The week after the elections it went to 2.60.

    I dont know about contracting,but I do agree with you on their Personnel policies!

    btw, Banco do Brasil and CEF are not going to escape from these policies either!

    Quite an interesting scenario,eh, ConceiÀƒ§Àƒ£o?

  • conceicao

    The three main areas of government interference traditionally have been in pricing, contracting and personnel policies. Recently, we have seen the company reverse its position on investment in the ethanol
    sector, specifically the attempt to use Petrobras’s reputation and financial resources to try to lock up an ethanol export deal with the Japanese – no doubt at the behest of the government in its efforts to
    develop an international ethanol market supported primarily by Brasilian exports. I view Petrobras offshore as an example of Brasilian comparative advantage – like Embraer and the Brasilian gasohol
    complex – and a capability that the bureaucrats should leave alone for multiple reasons. The major issue is whether the existing interence with the overall company is enough to starve offshore of the resources it needs to develop as a full-scale international competitor with the traditional majors. Being several levels above Pemex and PDVSA does not necessarily place a company near the top tier internationally. As of
    April, ’06, both the CEO and head of exploration and development were both PT party members as was the predecessor CEO.

  • João da Silva

    To:ConceiÀƒ§Àƒ£o
    [quote] Every time Petrobras demonstrates its world-class offshore prowess the odds that the
    bureaucrats in Brasilia will be able to significantly hinder the company’s development grow longer.
    [/quote]

    It is a very interesting statement you made.Are we thinking on same lines. Would love to hear about the b.crats in Brasilia hindering the progress.

  • conceicao

    Compare the circumstances of this discovery with the nationalizations in Venezuela and the mess involving Pemex. El Paso’s involvement is all for the better and parallels with Petrobras’s involvement in
    the recent breakthrough discovery of reserves in the deepest to date drilled project in the Gulf of Mexico. Every time Petrobras demonstrates its world-class offshore prowess the odds that the
    bureaucrats in Brasilia will be able to significantly hinder the company’s development grow longer.

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