Brazilian offshore oil discovery refutes peak oil theory

Brazil made one of the world's biggest oil discoveries of recent years yesterday, a huge deposit off the coastline of Rio de Janeiro, which officials claim will take it into the major league of the world's biggest energy powers.

The find at the Tupi field, about 155 miles off Rio, could yield a total of 8bn barrels of light crude and represent 40% of the oil ever found in Brazil.

Dilma Rousseff, chief of staff in the president's office and tipped as a possible successor, said the discovery could propel Brazil "to the level of Saudi Arabia and Venezuela".

"This has changed our reality," she said. "It is something that could contribute to Brazil moving from an intermediate nation in the petrol sector to another level."

The Correio Braziliense newspaper heralded the discovery with the headline God is Brazilian. The find could propel Brazil into the "first division of petrol producers and exporters", it added.

Oil experts said it was the biggest find anywhere in the world for at least seven years and would push Brazil's reserves into the global top 10 but comparisons to Saudi Arabia may be over-optimistic. Brazil's total reserves will rise to about 20bn barrels as a result of the discovery, compared with Saudi Arabia's 260bn, whose daily production is four times that of the Brazil.

"If confirmed, the recoverable volumes of oil and gas will lift significantly the quantity of existing oil in Brazilian basins, putting Brazil among the countries with big reserves of oil and gas," the company said.

Brazil's total oil reserves currently rank 17th in the world, with 14.4 billion barrels of oil equivalent. According to Petrobras the find could push South America's biggest country up to ninth place.

This Could be a big blow to peak oil Theorists who have been claiming that most of world’s recoverable oil has already been discovered and that world’s Oil production has peaking in 2005 and that no significant increase in oil production could be expected in the decades to come. The peak oil theory has been seen as the major driving factor behind the sky high oil prices of today.
The experience of Brazil's offshore drilling is proving that giant new oil fields are out there,
waiting to be discovered, just off shore along the continental shelf.


The "ultra-deep" Tupi field off the coast of Rio de Janeiro could hold as much as 8 billion barrels of recoverable light crude, and initial production should exceed 100,000 barrels daily, though experts believe the amount will then go much higher.

The Tupi find is just a ``tiny'' part of a new oil province that Petrobras believes is beneath existing fields, Chief Executive Officer of Petrobas Jose Sergio Gabrielli says. The oil at Tupi is a light grade, more valuable and cheaper to refine than the heavy crude that dominates Brazilian output.

The Tupi announcement was made as oil traded at record levels. Crude for December delivery closed yesterday at $95.46 a barrel on the New York Mercantile Exchange. Futures touched $98.62 on Nov. 7, the highest since trading began in 1983.

After Petrobras announced the find, government officials said they were removing from auction dozens of promising blocks near Tupi — so Brazil can keep the oil for Petrobras instead of selling it off to foreign international oil players. Brazil on Thursday announced it is withdrawing 41 blocks of prospective underwater oil extraction territory from an auction of oil blocks to be held this month. It will still put the remaining 261 blocks up for auction but will reserve the most promising areas around the Tupi field for Petrobras.