According to ANP, Brazil’s oil regulator, the South American country’s total reserves, which also include probable and possible reserves, soared 34.57 percent to 28.47 billion barrels. It also noted that proven natural gas reserves increased 15.23 percent, ending last year at 423 billion cubic meters (14.9 trillion cubic feet)
RIO DE JANEIRO – Brazil’s proven oil reserves rose 10.65 percent in 2010 to nearly 14.25 billion barrels, the biggest annual increase in the past eight years, the ANP oil regulator said Thursday.
Total reserves, which also include probable and possible reserves, soared 34.57 percent to 28.47 billion barrels.
The ANP also noted that proven natural gas reserves increased 15.23 percent, ending last year at 423 billion cubic meters (14.9 trillion cubic feet).
The new figures include initial production at the ultra-deep Lula and Cernambi fields, the first to be developed in Brazil’s promising offshore, pre-salt frontier, so-named because it is located deep below the ocean floor under a shifting layer of salt.
Located in a roughly 160,000-sq.-kilometer (62,000-sq.-mile) area, the pre-salt fields could potentially quintuple the country’s current reserves and transform the South American nation into a major oil power.
But accessing them will be very costly and pose an enormous technical challenge because they are located at depths of between 5,000-7,000 meters (16,400-22,950 feet). Drastic changes in temperature as the oil is brought to the surface also add to the technical complexity of developing those fields.
A law signed late last year declares the pre-salt reserves to be state property and stipulates that they will be explored and developed by consortiums in which Brazilian state-controlled oil company Petrobras will have a minimum 30 percent stake.
It establishes a production-sharing model in which the consortiums must give the Brazilian government a percentage of the extracted crude. They will also be required to make royalty payments.
Under the legislation, Petrobras will be the operator of all projects and also can be awarded exploration contracts without a competitive bidding process.
The Brazilian government owns more than 50 percent of the voting rights in Petrobras, an open capital company whose shares trade on the Sao Paulo, New York, Madrid and Buenos Aires stock exchanges.
Petrobras became the second largest company in the Americas by market capitalization after a $66.9 billion share sale last September, the biggest in history. EFE
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