• 4 minutes Is $60/Bbl WTI still considered a break even for Shale Oil
  • 7 minutes Oil Price Editorial: Beware Of Saudi Oil Tanker Sabotage Stories
  • 11 minutes Mueller Report Brings Into Focus Obama's Attempted Coup Against Trump
  • 15 minutes Wonders of Shale- Gas,bringing investments and jobs to the US
  • 12 hours Apartheid Is Still There: Post-apartheid South Africa Is World’s Most Unequal Country
  • 5 hours Visualizing How Much Oil Is In An Electric Vehicle (Hint: a heckuva lot)
  • 4 hours Theresa May to Step Down
  • 6 hours Look at the LONGER TERM bigger picture of international oil & gas. Ignore temporary hiccups.
  • 16 hours Total nonsense in climate debate
  • 16 hours IRAN makes threats, rattles sabre . . . . U.S. makes threats, rattles sabre . . . . IRAQ steps up and plays the mediator. THIS ALLOWS BOTH SIDES TO "SAVE FACE". Then serious negotiations start.
  • 15 hours Evil Awakens: Fascist Symbols And Rhetoric On Rise In Italian EU Vote
  • 19 hours Will Canada drop Liberals, vote in Conservatives?
  • 19 hours Trump needs to educate US companies and citizens on Chinese Communist Party and People's Liberation Army. This is real ECONOMIC WARFARE. To understand Chinese warfare read General Sun Tzu's "Art of War" . . . written 500 B.C.
  • 19 hours Canada's Uncivil Oil War : 78% of Voters Cite *Energy* as the Top Issue
  • 15 hours Apple Boycott in China
  • 11 hours Australian Voters Reject 'Climate Change' Politicians
  • 2 hours Why is Strait of Hormuz the World's Most Important Oil Artery

Another Discovery for Financially Moribund Petrobras

Bottom Line: A new discovery for Petrobras offshore in the northeast of Brazil is good news in theory, but bad news in terms of investment for development that the state-run giant doesn’t have.

Analysis: Petrobras has made another oil discovery off the northeast coast of Brazil, on the SEAL-11 offshore exploration block, with unconfirmed reports estimating more than 1 billion barrels of oil, and the state-run oil giant saying the new find would be producing 100,000 barrels a day as of 2018. Petrobras is the operator of the block, with a 60% share, while India’s Bharat Petroleum Corp (BPCL) holds a 40% stake in a JV with Videocon Industries Ltd. Exploration in the block began in 2008. In India, shares in Bharat and Videocon both jumped on the news.

And there is more good news for cash-strapped Petrobras this week, as the Brazilian government considers ways to help the state-run giant finance the massive investment it will need to make after the auction later this month for the giant offshore Libra field. While Petrobras has the technical capacity to develop Libra, it lacks the financial resources. Eleven companies have signed up for to participate in the Libra auction, and once a winner is announced, Petrobras will have to come up with a minimum 30% of the nearly $6.7 billion up-front fee the winning bidders have to pay to the government of Brazil. Petrobras will hold a minimum 30% stake in any Libra deal, and will serve as the operator.  On top of that, Petrobras has to come up with 30% of the estimated $180 billion it will cost to develop the field over 35 years. The government is considering measures such as raising Brazilian fuel prices, reducing dividends on the government’s share in Petrobras, and modifying the terms of an oil-for-stock swap that were set down in 2010.

Recommendation: Libra is estimated to hold between 8 billion and 12 billion barrels of oil. So if the new find in the SEAL-11 block in the northeast ends up holding the 1 billion barrels that is currently being thrown around as an estimate, it will not replace Libra as the country’s new oil frontier, as mainstream media have been headlining. And this 1-billion estimate has not been supported, even by Petrobras, which is keeping mum on the estimates for now. This new find could either help Petrobras, or dig it into another financial hole. Petrobras is in deep debt largely because of government policy that has forced the company to continue…




Oilprice - The No. 1 Source for Oil & Energy News