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Brazil: Increased state control could deter investment

PETROBRAS made a second discovery in the Santos basin's BM-S-11 block, offshore Rio de Janeiro, in September, writes Robert Cauclanis. The Iara field, the operator claims, holds 3bn-4bn barrels of recoverable reserves, of mostly light oil. The block's other discovery is the 5bn-8bn barrels of oil equivalent (boe) Tupi discovery.

In total, Petrobras and its partners – BG Group and Galp Energia – appear to have identified 8bn-12bn boe in BM-S-11, as much as doubling Brazil's proved reserves. But if the estimates of Brazilian government ministers and Petrobras sources prove correct, the country's pre-salt bounty is many times larger. Tentative figures range from 30bn-80bn boe of recoverable reserves, suggesting the country may have discovered an oil play equal to, or larger than, the North Sea before development began there. "We can be one of the largest oil producers in the world in a decade," Petrobras' chief executive, Jose Sergio Gabrielli, said at September's Rio Oil & Gas conference. Offshore potential St

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