Brazil reduces estimate for ‘gigantic’ oil field after drilling

May 26, 2011 12:00 AM

Brazil’s oil regulator reduced its estimate for the Libra field after conducting a drilling program at the site, director Magda Chambriard said.
The agency, known as the ANP, said the field likely holds 5 bn barrels and may contain as few as 4.5 bn barrels, Chambriard said. That’s down from a previous estimate of as many as 15 bn barrels.

The agency said in October 2010 that the field may hold “gigantic” reserves almost twice as large as those of Tupi, which has since been renamed Lula and was the biggest discovery in the Americas in the past three decades.
Brazil is counting on large discoveries in the so-called pre-salt region offshore to fund social programs aimed at reducing poverty in South America’s largest economy.

“Libra, before drilling a well, was statistically calculated as an opportunity of 3.7 to 15 bn barrels,” Chambriard told. “We drilled, we reduced uncertainty, and now the most probable volume is 5 bn barrels. It could be 4.5 bn, it could be 6 bn.”
The regulator is waiting for lawmakers to approve new legislation on oil royalties before auctioning Libra and other exploration areas in the pre-salt region in deep waters of the Atlantic Ocean, Chambriard said. The government’s first auction will include the Libra field, she said.

Biggest share sale
State-controlled Petroleo Brasileiro will operate all new concessions in the pre-salt under new regulations. The company raised about $ 70 bn in the world’s biggest share sale ever as it seeks cash to fund exploration.
Brazil plans to auction 174 oil exploration areas on land and off the coast of northern and north-eastern Brazil in the third quarter of 2011.

“We’re expecting all the large companies,” Chambriard said about possible bidders for the blocks. “We’re including larger exploration blocks at the request of the companies.”
The exploration licenses to be awarded in so-called Round 11 will be bigger than in previous auctions because there hasn’t been much exploration in the region, she said.

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