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Tuesday, April 15, 2008


putting a dent in peak oil

good news for the oilmen:

Haroldo Lima [head of the National Petroleum Agency] told reporters the find, known as Carioca, could contain 33 billion barrels of oil equivalent, five times the recent giant Tupi discovery. That would further boost Brazil's prospects as an important world oil province and the source of new crude in the Americas.

... “It could be the world's biggest discovery in the past 30 years, and the world's third-biggest currently active field,” Mr. Lima, head of the government's oil and fuel market regulator, told reporters at an industry event in Rio de Janeiro.

... Analysts said the estimate was probably still preliminary, although it did not contrast with some geologists' forecasts made in the past.

“It's a very relevant number, basically triples the reserves. But it still seems a little premature to have a precise number while they are drilling a second well,” said Felipe Cunha, an analyst with Brascan bank in Rio de Janeiro.

The Carioca area lies west of Tupi in the prolific Santos basin, off the coast of Sao Paulo state. BG has a 30 per cent stake in the project and Repsol 25 per cent.

“It's subsalt, and we knew there were big expectations for the subsalt cluster in addition to Tupi. But, if this is confirmed, it's really huge,” said Sophie Aldebert, associate director with Cambridge Energy Research Association in Brazil.

“With that size, you'd have plenty of gains of scale that could easily offset the subsalt geological challenges,” she added. The challenges include shifting salt clusters that require reinforced piping and producing in deep waters from huge depths under the ocean floor.

... Most of Petrobras crude comes from heavy-oil Campos basin fields, but recent subsalt discoveries could make Brazil a major producer of higher quality oil.

this find emerges even as oil is hitting new record highs at $112 on news that russia -- now the world's largest oil producer (not saudi arabia, you read that right, since 2006 -- though saudi is the largest exporter of oil) and one of the few major oil-exporters to be consistently increasing oil for export in recent years -- actually saw production decline in the first quarter, seeming to verify many fears that russian oil production is at or past peak.

to be sure, even 33bn barrels won't change this dynamic. but perhaps it will buy some time.

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