The discovery, known as Jupiter, is beneath more than 5 kilometers (3.1 miles) of ocean and seabed and contains natural gas liquids known as condensate as well. It's located about 290 kilometers (180 miles) off the coast of Rio de Janeiro state, 37 kilometers from the Tupi field, Rio de Janeiro-based Petrobras said in a statement today sent by e-mail.
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 find, if it contains as much gas and oil as Tupi, would be the second giant strike reported by Petrobras in the past 10 weeks. The Tupi field, disclosed Nov. 8, has as much as 8 billion barrels of oil and gas, three quarters of the reserves of Kazakhstan's 12-billion-barrel Kashagan field. Kashagan was the largest oil discovery in the last three decades. ``This find makes it clear that what we have in Brazil is another huge geological basin,'' John Parry, senior analyst with Jonn S. Herold Inc., a Norwalk, Connecticut-based energy research unit of Denver-based IHS Inc., said in a telephone interview. ``As they say the best place to find oil and gas is usually right near where you've already found it.''
Checking proportions
When the oil field's discovery was announced last November, the Brazilian government said Tupi could turn the country into one of the World's major oil suppliers.
Analysts were more cautious, pointing out the difficulty of extracting Tupi's oil from beneath deep layers of rock and salt.
Petrobras, though, is a world leader in deep water oil production, and the find was hailed as a major discovery for Latin America's largest country.
The discovery was made by a consortium made up of Petrobras - which has an 80% stake in the find - and Portugal's Galp Energies.
A number of surveys will now have to be carried out to try to establish the scale of the new field.
U.S. Supplier
Petrobras, which owns 80 percent of Jupiter and operates the well, said the oil bearing rock is more than 120 meters wide, suggesting that ``the area of this structure could have dimensions similar to Tupi.''
Lisbon-based Galp, which also holds a stake in Tupi, owns 20 percent.
Should the estimates for Tupi and Jupiter be confirmed, it would more than double Petrobras's 11.7 billion barrels of reserves, according to U.S. Securities and Exchange Commission standards.
Brazil's discoveries may result in the country overtaking such producers as Venezuela and Mexico and becoming a major supplier to the U.S., Parry said.
``It is conceivable that after 2010 or 2012 you could see Brazil and Petrobras matching Venezuela and exceeding them,'' he said. ``Brazil would become an important producer in the western hemisphere and you would have a natural market to the U.S.''
A Tupi sized field would likely produce about 1 million barrels a day in 5-to-10 years, he said.
Petrobras worldwide operations produced an average 2.37 million barrels of oil and natural gas equivalent a day in December, according to Petrobras' Web site. Brazilian output was an average 2.3 million barrels a day, 80 percent from its offshore Campos and Santos basins.
The Jupiter well is in the BM-S-24 exploration block in Brazil's offshore Santos Basin. As with Tupi, the hydrocarbons are in rock formations beneath a layer of salt.
Petrobras preferred shares, the company's most-traded class of stock, fell 5.33 reais, or 7.4 percent, in Sao Paulo. Trading ended before the Jupiter announcement was made. Galp fell 65 centavos, or 4.6 percent to 13.65 euros in Lisbon before the announcement.
5 comments:
First, the only thing that can dispute the peak oil theory is for the production of crude oil extracted to increase beyond the current production level. Technical and political challenges both can lower the output. I believe world production is about 81 million barrels per day. So, this new oil field increases production by 1 million barrels per day. So what. Oil production from existing oil wells is falling off about 5 million barrels per day per year. Most people believe the oil production will peak somewhere between where it is now and 100 million barrels per day. You can't really tell where the peak has occurred until you pass it.
I am not saying that the productaion from these well will compensate for the lose of production due to political instability and declining productivity of older wells. But getting two major discoveries in a span of 10 weeks point to the fact that the offshore oil potential has not been fully utilised, and vast reserves are lying undiscovered in worlds oceans.So, the claim of peak oil theory that most of world's recoverable oil has been discovered does stand good.
The first indications / drill holes indicate the oil deposits off the coast of Brazil are large, they are not nearly as large as the Ghadar (? sp) deposit in Saudi. To extrapolate and say that there are many more of these deposits to be found is a leap of faith, not science. Oil companies are buying back their shares at an alarming rate, in essence cannibalizing themselves. They are doing this instead of drilling more holes with this money. Perhaps they believe that there are not that many more places to drill.
Energy supply is the most serious problem facing the United States. Until it filters down to the average guy on the street how serious this problem is, we will be unable to find solutions at the rate we need them to avoid a substantial fall in the standard of living.
But fields even bigger that the Saudi Arabia's gharwar (not ghadar) could be found offshore.. especially in the vast expanses of pacific which remains largely unexplored. Extraction from these fields could be expensive and may signal the end of the ear of cheap oil. but still i don't believe that we will see and era of shortage yet .
When demand exceeds supply then I would call that a shortage. As I understand it, demand in China, India, and Asia for oil is going through the roof, not to mention us. So, if it is true we can't pump any more out of the ground from both technical and political problems, is demand about to exceed supply ... and if it does, will this qualify as a shortage?
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