Brazil’s Libra field may hold 15 billion barrels

By Peter Millard
Bloomberg News

Brazil found more evidence of oil at the government’s Libra offshore field, which may be the largest oil discovery in the Americas in more than three decades.

Brazil’s oil regulator, known as the ANP, found a second layer of hydrocarbons at Libra, according to records on its website dated Dec. 27. The regulator first discovered oil at the field in late October.

Libra is estimated to hold as much as 15 billion barrels of recoverable oil, which would eclipse Brazil’s total current reserve base and make it the biggest find in the Americas since Mexico discovered Cantarell in 1976. The estimate disclosed by the ANP in October means Libra may hold almost twice as much oil as state-controlled Petroleo Brasileiro SA’s nearby Tupi field.

“Fifteen billion barrels, all things considered, is a big number,” Gianna Bern, president of Brookshire Advisory and Research Inc., a Chicago-based adviser to oil producers and investors, said today. “It makes that whole basin attractive for all of the consortiums that are currently operating there.”

President Luiz Inacio Lula da Silva said Dec. 9 that Brazil’s deepwater fields hold more oil than Petrobras Chief Executive Officer Jose Sergio Gabrielli says they contain. BG Group Plc, the U.K.’s third largest energy company and a partner with Petrobras at Tupi, said last month that the field holds 9 billion barrels of oil, higher than Petrobras’s estimates of as much as 8 billion barrels.

35 Billion Barrels

Exploration at deepwater oil fields in Brazil will “intensify” next year as Petrobras and other oil companies add drilling rigs, Credit Suisse said in a research note yesterday. Petrobras aims to more than double its oil reserves to as many as 35 billion barrels by 2014.

Libra is the first field the government plans to auction next year under the country’s new concession model, Magda Chambriard, a director at ANP, said in September.

Petrobras, based in Rio de Janeiro, will operate all new concessions in the so-called pre-salt area where Libra and Tupi were discovered.

Shares of the state oil producer jumped to a six-week high today after the country’s oil output climbed to a record in November and crude traded near a two-year high.

Petrobras climbed 1.9 percent to 26.55 reais in Sao Paulo trading at 12:42 p.m. in New York, the biggest gain in more than a week and the highest price since Nov. 11.

‘Positive Trend’

“Positive production trends should help to boost confidence in Petrobras’s ability to deliver output growth,” Bank of America analyst Frank McGann wrote in a note to clients today.

Brazil’s production of oil rose to a record 2.089 million barrels a day last month, the ANP said on its website yesterday. Petrobras’ total November oil and gas production was 2.6 million barrels a day, of which 2.03 million barrels was in Brazil, according to an e-mailed statement.

Crude for February delivery gained 39 cents, or 0.4 percent, to $91.39 a barrel on the New York Mercantile Exchange. It touched $91.67, 21 cents below the two-year intraday high of $91.88 reached yesterday. Futures have advanced 15 percent this year.

Photo: Oil workers of the government-run Petrobras celebrate on the P-50 rig after it started producing off Brazil’s south Atlantic coast on Friday, April 21, 2006. (AP/Patricia Santos)