Brazilian state-run oil company Petroleo Brasileiro (PBR, PETR4.BR), or Petrobras, said late Wednesday that a well off the country's northeast coast had confirmed the region's potential as a new frontier for oil and natural gas production.
The well off
Brazil
's
northeastern state of Sergipe discovered a reservoir about 50 meters thick that
contained light oil and natural gas, Petrobras said. The well was drilled in
the Moita Bonita offshore area, where Petrobras first discovered oil in 2012.
Development of the oil fields could bring an economic boom for
Brazil
's
impoverished northeast, as well as represent a relatively low-cost path toward
boosting Petrobras's flagging crude oil production. The oil finds off the coast
of
Sergipe
are closer to shore and not as complicated to
develop as larger fields found trapped under a thick layer of salt off the
coast of southern
Brazil
.
Geologists estimate that the waters off Sergipe could potentially hold more
than 1 billion barrels of recoverable crude.
In October, Petrobras Chief Executive Maria das Gracas Foster called the
Sergipe finds a "beautiful discovery." Petrobras expects to start
production of about 100,000 barrels of crude oil per day in 2018, Ms. Foster
added, while declining to give an estimate for the amount of oil the fields
could potentially hold.
The discoveries could also affect economic growth on the other side of the
globe, where sister emerging-market powerhouse
India
is
importing ever-greater amounts of crude oil to fuel development. While
Petrobras holds a 60% stake in several of the exploration areas off the coast
of
Sergipe
, the remaining 40% is held by a joint-venture
owned by Indian companies Bharat Petroleum Corp. (500547.BY) and Videocon Industries Ltd. (511389.BY).