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Brazil: Petrobras strikes again

It keeps getting better for Petrobras. Still glowing with satisfaction following the discovery of the Tupi oilfield, the firm announced another find last month: gas and light oil in north of the Camarupim field, in the Espírito Santo basin. Test results from two wells – 4-ESS-177 and 6-ESS-168 – in block BM-ES-5, "confirm the Espírito Santos basin's high potential for gas and light oil", says Petrobras. It expects to find more oil and gas nearby.

The first well was drilled to 708 metres from the surface water and found 101-metre thick gas-saturated sandy reservoirs at a depth of 3,417 metres, the company says. Light oil was also detected in shallower reservoirs, at a depth of 2,461 metres. Petrobras operates the block and holds a 65% stake, with the US' El Paso holding the remainder.

Although the Brazilian firm has not yet said how big the latest discovery is, the company believes its recent finds, especially Tupi, have put it on the verge of "its biggest oil province, comparable with the most important oil provinces in the world". The company says this new frontier ranges through the Espírito Santo, Campos, and Santos basins, in deeper horizons, and in the so-called pre-salt rocks. More work could increase the country's reserves by 50%, it says. The resource is estimated to be around 14bn barrels now, all in the "post-salt".

The latest discoveries will increase interest in the country's oil and gas sector. After a string of disappointing results in the upstream, foreign investment waned earlier this century. However, the prospect of further discoveries in the pre-salt has reignited interest. Foreign companies will be encouraged by a recent court decision that means pre-salt blocks offered in the 2006 licensing round will now be made available. The government had taken out an injunction to stop the 2006 round, which included several blocks in the pre-salt, but a court ruled last year that the auction should go ahead – with the pre-salt areas included. The 2006 round is now expected to be completed in March.

The 2007 auction, in November, took place just after Petrobras announced its Tupi discovery. Prior to the bid round, the government withdrew 41 licences that included prospective pre-salt areas. This decision is not expected to be overturned.

Meanwhile, Petrobras and StatoilHydro, the recently merged Norwegian state-controlled oil company, have signed a co-operation agreement that will see the two deep-water specialists pool upstream technology and data. The agreement will last for five years.

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