[Oil-Finder]

Some more info, in case anyone's interested: link

12 Dec 2007 Brazil's offshore oil bonanza may be even bigger by Thomas Lifson
We have covered with great interest the discovery of a huge offshore oil field by Petrobras, the Brazilian oil company. The Tupi oil field was reckoned to contain as much as 8 billion barrels of oil, an as-yet unknown fraction of which will be recoverable, but almost certainly a few billion barrels if past experience is any guide.

As was hinted at the time, a neighboring offshore tract shows promise of being far larger in terms of its oil potential. Recognizing this, the government of Brazil has postponed the auction of drilling rights in an area geologically similar to Tupi, in order to gather and analyze further information on its potential. Bloomberg reports:

A geological formation beneath a 2-mile (3.2-kilometer) layer of salt in Brazil's Santos offshore basin, is larger than Tupi and, if oil bearing, may contain "significantly more'" oil than Tupi, Gustavo Gattass, an analyst with UBS Pactual in Rio de Janeiro, said in a note to clients.
Petrobras, as Brazil's state-controlled oil company is known, Exxon Mobil Corp., Royal Dutch Shell Plc, Repsol YPF SA, BG Group Plc, Hess Corp. and Galp Energia SGPS all have concessions in the neighboring area, Gattass said, referring to the formation as "Sugar Loaf."
"Through crude measuring it appears that Sugar Loaf's area is about five times larger than that of Tupi," Gattass said, citing former Petrobras geologists and studies of Tupi and Sugar Loaf. "We expect the first announcements of a find over the next two months and test results between four and seven months."

An informed industry observer tells me that a figure of 21 billion barrels is being mentioned as a rough estimate of the potential of Sugar Loaf. Of course, at this stage it is all guesswork. For comparison, Saudi Arabia's petroleum reserves are officially reckoned at 260 billion barrels.
Even better news: there are other similar geological formations in the Santos Basin area. The ultimate potential of the area is unknown, but potentially gigantic: a multiple of the figures being mentioned today. [...]

And a financial analysis:
--> Petrobras' Tupi Discovery Will Likely Be Profitable <--

[Oil-Finder]

Yet another update, in case anyone's interested, Petrobras is still finding more oil in this area: link
And it looks like there might also be oil just to the south along the Uruguay coast: link

[AirlinePilot]

When Tupi starts flowing give us another call on how "significant " it is. I've learned one thing about oil exploration and extraction. Nothing is sure until the oil starts flowing.

Lets just wait and see how much they can flow out of those fields.

[Oil-Finder]

When Tupi starts flowing give us another call on how "significant " it is. I've learned one thing about oil exploration and extraction. Nothing is sure until the oil starts flowing. Lets just wait and see how much they can flow out of those fields.

Well, even though Tupi is several years away, Petrobras is already expecting a big % increase in oil and gas production next year: link

And it's already risen in November, with 2 projects capable of producing 280,000 barrels per day having just started up this month: link

[TheDude]

US only imports about 170-200Kbpd from Brazil, it should be noted. Expect them to get a good buttering up in the future.

[Oil-Finder]

link

Petrobras hits record 2 mln bpd Brazil oil output Wed Dec 26, 2007 8:55pm GMT By Andrei Khalip
RIO DE JANEIRO, Dec 26 (Reuters) - Brazil's state-run oil giant Petrobras said on Wednesday that it reached record domestic daily oil production this week of just over 2 million barrels, a level it wants to maintain on average next year.
Petrobras' (PETR4.SA: Quote, Profile, Research)(PBR.N: Quote, Profile, Research) exploration and production director, Guilherme Estrella said this year's average output should set at around 1.8 million barrels per day, meaning output should jump 11 percent in 2008 after this year's meager growth of just about 1 percent.

The new daily record was set on Dec. 25. Petrobras set the previous record of 1.91 million bpd in October 2006.
Six new platforms with a total capacity of 590,000 bpd came on-stream in 2007, but mostly after long delays, which prevented Petrobras from boosting average output to 1.9 million bpd this year as it had planned. Still, they drove production up toward the end of the year, and Estrella said December output would be much higher than in the previous months.

Apart from delays with bringing online new production units due to problems with suppliers in an overheated oil equipment market, Petrobras also had operating problems at some fields.
These included oil reservoir pressure problems in some areas and electrical equipment malfunctions on Barracuda and Caratinga as well as Albarcora Leste fields, Estrella said, adding that the problems have been mostly resolved.

He told reporters Brazil remained self-sufficient in crude this year after Petrobras met the country's net need in oil for the first time in 2006, as demand fluctuated around 1.8 million bpd. "We're producing in line with consumption," he said.
Four more platforms are to come online in 2008, including a natural gas unit with a 10 million cubic meters per day capacity, Petrobras said.

TUPI PRODUCTION TEST MAY START NEXT YEAR
Regarding Brazil's giant offshore Tupi find where Petrobras last month announced a reserve estimate of between 5 billion and 8 billion barrels of light oil and gas, Estrella said the company was "making every possible effort" to start a long-term production test there as soon as by the end of next year.
"We want to put a ship there and produce between 30,000 and 40,000 bpd from one or two wells for a few months to collect more data about the reserve," he said.

That stage would be followed by a 100,000 bpd pilot project, to start in late 2009 or early 2010 and last for two years, after which the field and surrounding areas where Petrobras has made discoveries should start pumping crude on a much bigger scale.
Petrobras will build a gas pipeline from Tupi, which will produce from the subsalt cluster, to the natural gas field of Mexilhao for the pilot project to go ahead.

Estrella would not confirm some analysts' reports that Tupi may have an even bigger neighboring field.
"We have several discoveries around Tupi, which would increase the reserves, and which we want to develop as one system taking advantage of both oil and gas production. But we don't have data backing up such ideas (of a larger reserve close to Tupi)," he told Reuters.

[Oil-Finder]

More updates . . .
Two days ago Petrobras announced a "Tupi-sized" offshore natural gas field, and yesterday the CEO of Petrobras said Tupi and this newest discovery's "indications point to big volumes."
We'll have to wait for further details.

[Oil-Finder]

Another update: Petrobras to spend $12 billion in Santos basin by 2012

[Oil-Finder]

In addition to the awaited "Sugar Loaf" field as well as the "Jupiter" field in the article above, there are still more large fields awaiting analysis: LINK
Highlight:

BG also said the Carioca discovery made in the Santos basin in 2007 had further prospects still to be explored, including two with "very large potential," the Corcovado and Iguacu complex.

[Oil-Finder]

Hmmm. Just encountered this. Yes, right now it is speculation, but it sounds like something to keep an eye out on.
This is the blog of an anonymous oil industry executive: LINK

Tupi To You, Too...Tupi is the new Brazilian oil find that has recently been upgraded from 8-12 billion barrels of oil recoverable to 30 billion barrels of oil recoverable. One field. It gets better. An acquaintance who consults for Petrobras described Tupi as his computer mouse on top of his circular conference table, and the overall structure that has not yet been assessed as his table. "It could be 500 billion to a trillion barrels". Of 30 gravity oil.
It is big enough find to cause Brazil to strongly discourage outsiders from doing any more drilling around these blocks. The Brazilian government removed 41 Exploration Blocks around Tupi from a recent sale. Petrobras holds Tupi with British BG Group and Portugals Galp Energy.

Fortunately for me, it is in 7-8,000 feet of water, and an additional 20-25,000 feet of sediments, underneath a salt canopy. That is engineering mojo. Look to Petrobras to usher in the new age of mega deep and hot drilling engineering breakthroughts while the Majors look envyingly from the sidelines. At least a million barrels a day by 2020 is what is prognosed... perhaps much more if the field is substantively bigger. The scale of the find is such that Brazil is being eyed as the Saudi's successor as the world's next swing producer.

[TheDude]

Hmmm. Just encountered this. Yes, right now it is speculation, but it sounds like something to keep an eye out on.

This is the blog of an anonymous oil industry executive.
LINK

Tupi To You, Too...

Tupi is the new Brazilian oil find that has recently been upgraded from 8-12 billion barrels of oil recoverable to 30 billion barrels of oil recoverable. One field. It gets better. An acquaintance who consults for Petrobras described Tupi as his computer mouse on top of his circular conference table, and the overall structure that has not yet been assessed as his table. "It could be 500 billion to a trillion barrels". Of 30 gravity oil.

Or not, Simmons says on CNBC:

CNBC: What about other major finds such as the major off-shore discovery Brazil has made that is estimated could be the third largest oil field in the world?

Simmons: There have only been five wildcat wells drilled there. That’s like me saying I have drilled a well in Kansas, and another in Colorado and in New Mexico and in the panhandle of Texas and if they are all part of one giant oilfield, it is the biggest oil field ever in the Western Hemisphere. That’s an enormous "if."

You can claim that, but the proof of that would only be after you drill about 100 wells and flow test them all. And what we know is that 99 percent of those types of reservoirs never connect.

Also linked at Simmons on CNBC - More Parade Rain (Brazil this time)

[copious.abundance]

Of course Matt Simmons is gonna say something like that. He's trying to up the price of oil to give his bet with Tierney a chance.

100 wells would practically be production level of development.

Yeah, Petrobras and all their partner companies are all lying and have no idea what they're talking about. Tupi, Sugar Loaf, Jupiter, Corcovado and Iguacu are all lies. So will any other future discoveries they make there. LIES! LIES! Any time an oil company says they've made a big discovery, it's a lie!

[copious.abundance]

Incidentally, to address Matt Simmon's complaint . . .

LINK

With apologies to Shakespeare, the question is just how large is the Tupi field? Secondly, how large are Brazil’s offshore oil reserves in total? The Brazilian government announced in November 2007 that the Tupi reserves were between five an eight billion barrels of oil. To a non geologist, it is incredible this volume can be predicated on the strength of just two wells drilled into the Tupi formation--though two were drilled in a nearby area--but 3D seismic imaging is a marvellous tool. Petrobras believe the field can produce 100,000 b/d within three years and 200,000 b/d within five years. These are relatively modest volumes but subsequently BG, a partner in the oil find, stated they thought the Tupi field could hold between 12 and 30 billion barrels, and maintained production could peak at as much as 1,000,000 b/d. This figure was supported by Wood Mackenzie, though they warned this would not happen till after 2020.

However, the matter does not end there, since Petrobras said that Tupi field is just a small part of the Santos Basin which could hold much higher reserves. This was confirmed when Petrobras announced another large discovery, the Carioca Sugar Loaf field some 50 miles west of Tupi, that may hold reserves of some 40 billion barrels. This was closely followed by the disclosure, in January 2008, of another large find, the Jupiter field, which Petrobras believe can hold reserves as large as those of Tupi. Taking the Espirito Santo, Campos and Santos basins together, it has been estimated total reserves could be as high as 60 to100 billion barrels.

[...]

[DantesPeak]

Incidentally, to address Matt Simmon's complaint . . .

LINK

With apologies to Shakespeare, the question is just how large is the Tupi field? Secondly, how large are Brazil’s offshore oil reserves in total? The Brazilian government announced in November 2007 that the Tupi reserves were between five an eight billion barrels of oil. To a non geologist, it is incredible this volume can be predicated on the strength of just two wells drilled into the Tupi formation--though two were drilled in a nearby area--but 3D seismic imaging is a marvellous tool. Petrobras believe the field can produce 100,000 b/d within three years and 200,000 b/d within five years. These are relatively modest volumes but subsequently BG, a partner in the oil find, stated they thought the Tupi field could hold between 12 and 30 billion barrels, and maintained production could peak at as much as 1,000,000 b/d. This figure was supported by Wood Mackenzie, though they warned this would not happen till after 2020.

However, the matter does not end there, since Petrobras said that Tupi field is just a small part of the Santos Basin which could hold much higher reserves. This was confirmed when Petrobras announced another large discovery, the Carioca Sugar Loaf field some 50 miles west of Tupi, that may hold reserves of some 40 billion barrels. This was closely followed by the disclosure, in January 2008, of another large find, the Jupiter field, which Petrobras believe can hold reserves as large as those of Tupi. Taking the Espirito Santo, Campos and Santos basins together, it has been estimated total reserves could be as high as 60 to100 billion barrels.

[...]

From the article:

The costs of drilling through some 7,000 feet of water and 17,000 feet into the earth will be high initially, but they should fall as more experience is obtained and the technology is improved.

Also they say the costs of development may be $100 billion.

I say show me the oil companies are willing to invest $100 billion here and I start to take this find more seriously.

Also it's my understanding that this field is mostly gas, and when they are talking about barrels, it's barrels of oil equivelent and not real barrels. Can anyone confirm they are talking about real oil barre;s here?

[copious.abundance]

AFAIK, the Tupi field is not mostly gas. If it was they would have said so. The Jupiter field they announced in January was mostly gas and condensate, and that's exactly what they said.
http://news.bbc.co.uk/1/hi/world/americas/7201744.stm

[copious.abundance]

Here's some technical info on one of the Tupi wells, for anyone interested.
LINK

Drilled to a true vertical depth of 19,680 ft, it penetrated an evaporitic salt sequence more than 2,000 m thick. Petrobras said the well flowed 4,900 b/d of 30[degrees] gravity oil and 4.3 MMscfd of gas from a deep pre salt reservoir through a 5/8-in. choke.

And, for you production junkies, here are Petrobras's Brazilian aspirations.

Brazil aspires to produce 4.5 million b/d of oil by 2015 with Tupi coming on stream. Prior to that, its target was 2.3 million b/d. Refining capacity is expected to leap to 3.5 million b/d from 1.5 million b/d by 2015.

[DantesPeak]

AFAIK, the Tupi field is not mostly gas. If it was they would have said so.

Actually, no they wouldn't.

The President of Brazil is usually talking about BOEs.

Oil industry publications say the opposite - it is mostly gas.

Sorry oil finder.

Poster's Note: Wow! Thats one big pool of sweet crude. This is a much bigger deal than that overhyped pre-election Jack play in the U.S. Gulf. That is a whole series of fields that might total 3-15 billion and my bet is mostly gas. This 200x800 kilometer Tupi sounds like its giant field status. I've read the Brazilians have taken 40 blocs of neighboring Santos offerings off the market to protect its development for Brazil. This might just be the first of many and it sounds like prudent nationalist post-peak oil development to me.

there are plenty of other caveats in the article. The estimated oil in place itself is only 1.5 billon barrels; the 10 billion barrels of 'oil quivalent' gas is in deepwater is for all practical purposes stranded; and no flow test results are indicated.

Unless there is enough flow rate to pay for the infrastructure Tupi Sui would suffer the same fate as the Jack 2 field.

Finally, because of the high costs of operating in deepwater, the fields have to be managed for fast, maximum production with steep declines. Ultimate recovery has to be sacrificed.

Down Stream Ventures

[copious.abundance]

Dante, your friend needs to read more carefully - and so do you.

From the article:

The Tupi Sui appraisal well, drilled about 10 kilometres south of an original find, which BG said in February showed resource in place of between 1.5-billion barrels and 10-billion of oil equivalent, confirmed a field that is 800 kilometres long and about 200 kilometres wide.

That 1.5 billion barrels was the lower end of a range of 1.5-10 billion barrels Petrobras stated in February of last year. But later, in November, Petrobras clarified the amount as 5-8 billion barrels.

There is nothing in that article which says that only 1.5 billion barrels is oil. Nothing. Zero, zilch, nada. Read it over carefully, for yourself:
The article in your link.

[copious.abundance]

A Sao Paulo newspaper is reporting another discovery in the Santos Basin. Petrobras has no comment. Will have to wait and see.
--> Another discovery? <--

Several days ago there was another rumor about a bigger-than-Tupi-sized discovery off Brazil's northeast coast. However, a spokesman for Petrobras denied this one - though I noticed it took them a couple days to deny it. Will have to wait and see on this one too. I'm actually disinclined to believe this particular one, but ya never know.
--> Oil off Brazil's northeast coast too??? <--

[copious.abundance]

Hmmm, did a little sleuthing. I wonder if this new one in the Santos Basin is the same one as Jupiter???

--> BM-S-8 is the same as Jupiter???? <--

The mystery deepens.