Brazil - sitting on a gold-mine of oil and gas reserves!!!!!

In a dynamic industry such as oil & gas, the recent discoveries in the presalt layers off Brazil could rank as the biggest in the world in several decades. Due to these significant discoveries, the Brazilian government has been grappling with how to structure and regulate exploration, drilling, and the potential for a large influx of foreign investment.

What is pre-salt?

• The pre-salt region is located approximately 170 miles off the coast of Brazil in the Atlantic Ocean. The region likely ranges from Espírito Santo to Santa Catarina State, measuring 497 miles in length and 124 miles in width.
• The region is named “pre-salt” because the oil is held beneath deep and ultra-deep waters, around 3,000 meters of sand and rock, and an additional layer of salt that, in places, reaches thicknesses of over 2,000 meters, making extraction challenging.

 …. tip of an iceberg!!

Over the span of 10 to 15 years, the industry’s deepwater capabilities has progressed manifold along with the realization that the largest prospects lay in deeper and deeper waters. The string of discoveries in the pre-salt region have proven the same.

• In 2006, Petrobras discovered the Tupi field in the Santos Basin which holds estimated reserves of about 5 to 8 billion barrels.
• In September 2010, the Brazilian Government announced the discovery of the Libra field which is said to be largest oil field discovered anywhere in the world since the enormous Kashagan find (over 17 billion barrels) in Kazakstan in 2000.
• Devon Energy, which holds 6 exploration blocks in the pre-salt, announced an discovery in the Campos Basin , quite close to the Jubarte field.
• The  Petrobras as operator and 45% owner, has made an important discovery of very light oil in the ultra-deep waters of the Santos Basin.
• Maersk Oil has discovered oil in the offshore Campos Basin in a license jointly owned with the Brazilian independent OGX.

Source: Derrick Petroleum Planned Exploration Wells Database

As a result of recent major discoveries, oil and natural gas potential reserves in Brazil are now recognized as some of the largest in the world. . Hence, many foreign players are ready to dip their toes in the waters off Brazil.

Source: Derrick Petroleum E&P Transactions Database

The combination of vast untapped potential oil and natural gas resources with a favorable regulatory framework positions Brazil as one of the most attractive petroleum regions in the world today.

Brazil- World’s next oil bank!! O&G players flocking towards Brazlian pre-salt discoveries. BG to invest $30 billion in Brazil!!

Brazil's quest to remake itself into a global oil superpower is gaining momentum.

BG is to invest $30 billion in Brazil in the next decade, an increase from the $5 billion it has invested since 1994. BG has stakes in some of Brazil’s largest oil discoveries, including the 6.5 billion barrel Lula field, formerly known as Tupi. BG plans to produce 550,000 barrels a day in Brazil by 2020, or a third of the company’s total production by the end of the decade. Brazil is preparing to auction exploration areas in the first half of this year as the country plans to double oil production to 5 million barrels a day by 2020. Brazil also plans to auction exploration areas in the so-called pre-salt region in deep waters of the Atlantic where the Lula field is located.

Portugal's Galp Energia will also invest $4.87 billion through 2015 as it ramps up spending to pay for the company's share of developing massive oil fields including the Lula and Cernambi fields in Brazil's pre-salt region. Galp Energia is considering the sale of a 30% stake in its Brazilian assets to finance the company's investment plans. To know more read here: http://mergersandacquisitionreviewcom.blogspot.com/2011/03/galp-to-sell-42bn-stake-opportunity-for.html

Brazil- World’s next oil bank

A consortium of Petrobras, BG and Petrogal discovered the Tupi field in 2007, which contains substantial reserves that occur in a pre-salt zone 18,000 feet below the ocean surface under a thick layer of salt. Following Tupi, numerous additional pre-salt finds were announced in the Santos Basin, such as Iracema, Carioca, Iara, Libra, Franco and Guara. Additional pre-salt discoveries were also announced in the Campos and Espirito Santo Basins.

These significant discoveries have ignited interests among certain O&G companies, which made Brazil to see many foreigners like Maersk, Sinopec and BP stepping deep into the discoveries in 2010. Also, with the market rumors of Sonangol and certain Chinese companies interested in taking a stake in Galp Energia, this year will again see many more foreigners exploiting the Brazlian reserves.

See the Global E&P Transactions 2010 review: http://www.derrickpetroleum.com/reports1.html

Pre-salt deals of 2010...

In 2009, Brazil’s liquids production surpassed its liquids consumption. In the January 2011Short-Term Energy Outlook, EIA projects that Brazil will continue to be a net exporter through the end of 2012. As pre-salt discoveries boost Brazilian production in the medium and long term, crude oil exports should steadily increase.