Petrobras Finds 1.5 to 2 Billion Barrels of Light Oil

By Jeb Blount and Joao Lima

Nov. 21 (Bloomberg) -- Petroleo Brasileiro SA, Brazil's state-controlled oil company, found light oil in two wells off the coast of Brazil's Espirito Santo state, expanding its ``pre- salt'' discoveries in an area that's already producing crude.

There are probably 1.5 billion to 2 billion barrels of recoverable oil equivalent, Petrobras, as the company is known, said today on its Web site. The discovery has enough oil to supply all of Brazil's needs for two and a half years, according to BP Plc. The wells are located in the Parque das Baleias area, near the Jubarte oil field, Rio de Janeiro-based Petrobras said.

The oil off Espirito Santo state is in reservoirs beneath fields that are already producing crude, increasing chances that the company can use some of its existing rigs, pipelines and other infrastructure to get the oil.

``Finding oil in an area that already has infrastructure helps work a lot,'' said Gilberto Pereira de Souza, an energy analyst with Banco Espirito Santo in Sao Paulo. ``This discovery in an area that already has oil makes it much more interesting and Parque das Baleias will probably be made a focus in the company's strategic planning.''

On Nov. 11 Petrobras Chief Executive Officer Almir Barbassa said falling oil prices and a world credit crunch was pushing the company to focus on investments that will generate cash.

Another 1 billion barrels of recoverable oil and natural- gas equivalent are in the shallower reservoirs in Parque das Baleias, Petrobras said. Six wells have been drilled to pre-salt depths in Espirito Santo and all have found oil.

The 6-BFR-1-ESS and 6-BAZ-1DB-ESS wells were drilled about 80 kilometers (50 miles) from the coast in waters 1,348 meters and 1,426 meters deep. The oil was found beneath a 700-meter- thick salt layer after drilling 4,200 to 4,800 meters below the sea floor.

Petrobras preferred shares, the company's most-traded class of stock, fell 5.7 percent to 17.45 reais, the lowest since Nov. 30, 2005, at 11:12 a.m. in Sao Paulo.

To contact the reporters on this story: Jeb Blount in Rio de Janeiro at jblount@bloomberg.net; Joao Lima in Lisbon at jlima1@bloomberg.net