11/09/2007 11h17

New oil reserve may be worth US$ 48 billion

Gazeta Mercantil - 11/09/2007

With the discovery in the Tupi field, the Country is to be among the ten largest world oil producers. Yesterday Petrobras officially announced the discovery of the largest oil and gas reserve in the history of the Country. Extra-officially evaluated in up to US$ 48 billion, according to executives of the state company, the reserve has production potential between 5 and 8 billion barrels of oil equivalent (Boe, which includes oil and gas) only in the accumulation called "Tupi" (BM S-11), in the Santos basin. The news about the potential of the reserve was anticipated by Gazeta Mercantil in September of 2005. The effects of the discovery have been immediately felt in the stocks of the state company traded in the Stock Exchange of São Paulo (Bovespa) and in the New York Stock Exchange (Nyse). In Bovespa, the stock went up 14.45% in yesterday's trading session, closing at R$ 93.30. The appreciation in value was higher in New York, where Petrobras' ADR went from US$ 79 to US$ 99.65, with a high of 26.14%. Because of the huge strategic discovery the government has announced the exclusion of 41 blocks from the 9th Bidding Round, an action that caused surprise and frustration in the private oil companies. "The discovery is spectacular for the Country, but what is going to happen to the participation of the different actors in the exploration of oil after the government's decision of removing the best areas?", asks João Carlos De Luca, president of the Brazilian Institute of Oil and Natural Gas (IBP), which gathers the private companies.