In a press release, the enterprise reports that it is located in the area known as "Parque das Baleias" (Whale Park), north of the Campos Basin.

"The recoverable volume of discoveries, made in pre-salt reservoirs below the heavy oil fields of Baleia Franca, Baleia Azul and Jubarte, is estimated to be among 1.5 billion and 2 billion barrels of oil equivalent," according to the release.

The discovery was communicated to Brazil's National gasolineeum, Natural Gas and Biofuel Agency (ANP) as a relevant fact.

According to Petrobras, the two wells drilled are located approximately 80 kilometers off the coast. In these two wells, reservoirs are located between 4,200 and 4,800 meters below sea level, and have porous thickness with oil at 190 and 300 meters, which attests to the great potential of the findings.

According to the state-owned company, so far, six wells have already been drilled in the pre-salt section of Espí­rito Santo, all of which were successful. After the new discoveries, the estimated total oil volume in the Whale Park area, including reservoirs located above and below the salt layer, already totals to approximately 3.5 billion barrels of oil.

"The excellent results of those two drillings, the excellent results of the long-term tests at the first well to be drilled, 1-ESS-103A, and the logistic facilities already installed and being installed in the area are leading Petrobras to intensify its studies so as to speed up production in the pre-salt layer in the state of Espí­rito Santo," according to the release.

"The quality and porous thickness of the oil-bearing reservoirs proved to be even better than the initial expectations. The new discovery was confirmed by a cable test and revealed the existence of light oil, with specific gravity between 26° and 30° API, in an area of some 300 square kilometers (116 square miles) that has been very well defined seismically," said Petrobras in an official release.

Petrobras says that the set of data collected, in association with the knowledge that has already been acquired for the pre-salt reservoirs enabled to calculate the estimated recoverable volume.

Block BM-S-11 where the drilling has taken place is composed of two exploratory areas. In one of them, the first well, 1-BRSA-369A-RJS (1-RJS-628A), known as Tupi, was drilled and resulted in the discovery announced on June 11 2006, with an estimated recoverable volume of 5 to 8 billion barrels of light oil and natural gas, the Assessment Plan for which is currently in execution.

The Iara well, 1-BRSA-618-RJS (1-RJS-656), is in an area north of Tupi, some 230 kilometers (143 miles) off the coast of the city of Rio de Janeiro and at 2.230 meters (7316 feet) from the water line. The final depth of the drilling was 6,080 meters (19,947 feet).

The consortium exploring the Iara well in block BM-S-11 in ultradeep Santos basin waters is made up of Petrobras (operator 65%), British Gas Group (25%) and Galp Energia (Portugal) (10%).

"The consortium will give continuity to the exploratory activities and to the investments in this area via a Discovery Assessment Plan to be submitted to the ANP (Brazil's energy agency), as provided for in the Concession Agreement, in order to characterize the field better."

This is the second deposit of the pre-salt area of which Petrobras releases potential production data. Brazil which has proven reserves of 14 billion barrels of oil, the pre-salt reservoirs could represent an 85% increase.

Non official estimates in Brazil mention the possibility of 50 to 80 billion barrels, which would have the country among the world's ten leading in reserves, but there is no Petrobras confirmation.

However the Brazilian government has established a task cabinet to analyze where to invest the windfall earnings if such reserves are confirmed as well as introducing reforms to the current exploration and exploitation model.

Bolivia Cuts Brazil Gas

Bolivian President Evo Morales said that he is expelling the U.S. ambassador in Bolivia for allegedly inciting violent opposition protests. Morales' announcement came hours after a pipeline blast triggered by saboteurs forced the country to cut natural gas exports to Brazil by 10%.

"Without fear of the empire, I declare the U.S. ambassador 'persona non grata'" Morales said in a speech at the presidential palace. He added he instructed his foreign minister to send a diplomatic note to Ambassador Philip Goldberg whom he accused of conspiracy with "separatists and divisionists."

In Washington, US State Department spokesman Gordon Duguid called the accusation "baseless" and said the US government had not yet received a note about the ambassador.

The Bolivian president is facing for the second week a wave of increasingly violent anti-Morales protests, the harvest of an "alliance between Bolivia's extreme right and the US government."

Ambassador Goldberg met last week with Ruben Costas, one of Morales' most virulent opponents. Costas is governor of Santa Cruz, Bolivia's richest province and the seat of a pro-autonomy revolt against the nation's first indigenous president.

Anti-Morales protests reached a crescendo on Tuesday with the sacking and burning of government offices in Santa Cruz in which at least 10 people were reported injured. Anti-government activists also seized several natural gas installations in the east.

In the eastern province of Tarija demonstrators triggered Wednesday's pipeline blast by closing a valve, creating pressure that ruptured the line near the border with Paraguay and set off a fire, the government said.

No injuries were reported in what state energy company president Santos Ramirez called "a terrorist attack." Ramirez said both gas plants remained occupied by protesters on Wednesday afternoon and indicated Army troops had been sent to recover the plants and impose order. He estimated damages and losses in 100 million US dollars, plus three weeks to repair the pipeline.

The pipeline blast reduced by 3 million the 30 million cubic meters of gas Bolivia sends Brazil each day, he said. But in Brazil, Mining and Energy Ministry officials said the gas flow remained normal. Any supply interruption could have serious consequences since Bolivia supplies Brazil with 50% of its natural gas used for power generation and cooking.

Morales' opponents in the east are seeking a greater share of revenues from natural gas – Bolivia's chief export – for the richer lowland provinces, home to the bulk of its gas fields. But Morales has devoted much of those revenues to programs that benefit the poor and elderly. He has called the protests a "civil coup."

Morales is seeking approval in Congress for a referendum next December for constitutional changes which are fiercely opposed by opposition governors who rule five of Bolivia's nine provinces. They want greater autonomy and more control over natural gas revenues in their areas.

The president wants to give more power to the country's indigenous and poor communities, by carrying out land reform and redistributing gas revenues.

Mercopress

The new discovery well, called 1-BRSA-618-RJS (1-RJS-656) and informally knows as Iara, is located in the smaller area of the original Tupi block, approximately 230 km (143 miles) off the coast of the city of Rio de Janeiro, and 2,230 meters (7316 feet) from the water line.

The well is still being drilled in search of deeper prospects, said the Petrobras release.

The oil in the Iara field, controlled 65% by Petrobras, 25% by the BG Group and 10% by Portugal's Galp Energia is near the Tupi field, where Petrobras has estimated recoverable reserves at between 5 billion to 8 billion barrels.

The discovery was proved by a light oil sampling collected via a cable test carried out in reservoirs at a depth of 5,600 meters (18,373 feet) and was officially reported to the Brazilian National Petroleum Association (NPA) this week, reported Petrobras.

Experts agree that the sub-salt production may be technically challenging and costly, partly because salt movement requires reinforced piping, which can still be damaged. Production from above the salt level is easier.

Nevertheless analysts are bullish on Brazil's oil potential, expecting the country to become a major world oil producer in the next decade. Brazil already produces enough to meet its net oil needs of about 1.8 million bpd, and exports some crude.

Last week in London Petrobras president, José Sergio Gabrielli de Azevedo and the corporation's European general manager Joaquim Dib Cohen following a meeting with investors, announced the beginning of production in the pre-salt field.

Gabrielli said output from the first pre-salt well in the Jubarte field, in the Campos Basin, is expected to begin in September. Initial production is anticipated to be 10,000 bpd. The well is interconnected to platform P-34, which went online in late 2006, in Espí­rito Santo, in the Brazilian southeast.

Gabrielli also revealed that long term testing at the Tupi field is scheduled for March 2009 and the pilot project should begin production by 2010 with initial output in the range of 100,000 bpd together with some 3.5 million cubic meters of natural gas pd.

Petrobras also announced that the Agbami Field off Nigeria began production this week. The Brazilian corporation holds a 13% stake of the consortium made up of Norway's StatoilHydro, US Chevron, acting as operator, plus the Nigerian National Petroleum Corporation and Famfa Oil Limited.

The FPSO (Floating Production, Storage and Offloading) type vessel that operates in block OML-127 (Agbami) is the largest ever of its kind and is capable of producing 250,000 barrels of oil per day. The field's average depth is 1400 meters.

Agbami production is expected to peak in the second half of 2009. Petrobras' share will be 33,000 boed of the light oil production, with API gravities ranging from 43 and 45 degrees. This production will represent some 13% of the volume Petrobras produces abroad.

Mercopress

According to Petrobras, the discovery was made within the area of the Golfinho field, 60 kilometers (37 miles) away from state capital Vitória, at a depth of 1,374 meters (4,508 feet).

"Initial estimates point to a potential of 150 million barrels of recoverable oil," the company stated in the release.

To the state-owned company, the finding "opens up new vistas with regard to exploration in the area, and has the advantage of being located near the infrastructure already installed at the Golfinho Field." The company believes that the new area may become operational soon.

At the end of May, Petrobras had announced a discovery of an "important accumulation of petroleum" in shallow waters at the southern portion of the Santos Basin, along the coastline of the state of São Paulo (SE Brazil). According to the company, the drilling of well x1-BRSA-607-SPS (1-SPS-56) proved presence of light oil in reservoirs located above the salt layer.

The company, which is the sole concession holder for bloc BM-S-40, where the reserves are located, also informed that tests point to high flow and a production potential of 12,000 barrels per day in each well.

The exploration well is located 275 kilometers to the south of the city of Santos, where the sea reaches depths of 235 meters. Tests are being conducted in a reservoir shortly over 2,000 meters deep. Petrobras also informed that it was  going to drill another exploration well in the same bloc starting in July.

On July 3, the Brazilian oil company informed that it had achieved a new record in monthly production in the country in June. An average of 1.867 million barrels were extracted per day during that month.

The total surpassed the previous record, achieved in December 2007, by 12,600 barrels per day. According to the company, the average for June was 4.2% greater than that of June 2007, and 0.7% greater than recorded in May 2008.

Petrobras also told that the performance resulted mainly from the entry into operation of new wells linked to the P-52 and P-54 platforms, located in the Roncador Field, at the Campos Basin, in the southeastern coast of the country, and to the Piranema platform, in the coast of the northeastern Brazilian state of Sergipe.

The consortium operating BM-S-9 includes Petrobras (45% and operator), Britain's BG Group Plc. (30%) and Repsol-YPF (25%).

Block BM-S-9 is composed of two exploratory areas. Well 1-BRSA-491-SPS (1-SPS-50) was the first and largest drilled, informally called Carioca, which resulted in the discovery announced on September 5 2007. At the time Brazil's petroleum regulator said it could contain as many as 33 billion barrels of oil.

The new well, 1-BRSA-594-SPS (1-SPS-55), informally called Guará, is located in the smaller area of the block, at some 310 km (193 miles) off the coast of the State of São Paulo and at 2.141 meters (7024 feet) from the waterline. The drilling in the well continues in search of deeper objectives.

The discovery was proved by an oil sample collected via a cable test carried out in reservoirs situated at a depth of nearly 5,000 m (16,404 feet).

"After well completion, the Consortium will proceed with the required activities and make the investments that are needed to verify both the field's dimensions and the characteristics of the oil reservoirs." Following on the Concession Agreement the consortium will forward an Assessment Plan to Brazil's National Petroleum Agency.

However analysts consider that the Carioca reserves will not be properly tested until a well is drilled later this year in the neighboring BM-S-22.

"Together with our partners, we will now continue to advance our evaluation and development program, targeting initial production from the pre-salt Santos Basin during 2009," said Frank Chapman, BG chief executive.

Further assessment of the well will be carried out to determine the scale and characteristics of the reservoir. Once this is completed, an evaluation plan will be submitted to Brazil's National Petroleum Agency, BG said.

Brazil has turned into the key to BG's long-term growth following the Tupi find in 2006. Tupi was hailed as one of the world's largest oil strikes after official estimates placed the field's oil-on-place resources at anywhere between 12 billion and 30 billion boe, and recoverable reserves of 5 billion to 8 billion boe.

BG owns a 25% stake in Tupi, while Petrobras owns a 65% stake and is the project operator. Portugal's Galp Energia holds the remaining 10%. Tupi should be capable of producing up to one million barrels of oil equivalent a day once the field is fully developed. Guará is BG's fifth oil find in the Santos Basin since it began drilling the area in 2005.

Mercopress

According to a release from the company, the consortium of Petrobras (80%) and Portugal's Galp Energia (20%) discovered light oil in a pioneer well located 280 kilometers off the coast of the State of Sao Paulo, 2.234 meters below sea surface.

The well's depth in the Santos Basin pre-salt layer is 5.350 meters. "The well has not been tested yet", said the release but the consortium will undertake the necessary activities and make the required investments to check the field's dimensions."

Petrobras expects domestic oil and gas production to rise more than 14% next year from the average so far this year as platforms that had come on stream with delays in 2006 reach capacity and others are incorporated.

Petrobras said in a statement output should rise to 2.36 million barrels per day of oil equivalent. However it did not provide separate figures for expected oil and natural gas output. In the first 11 months of this year, oil production averaged 1.79 million bpd and gas output was about 271,300 bpd in oil equivalent.

The company said it would spend US$ 14.4 billion in 2008 in exploration and production out of a total investment of about US$ 27.5 billion in line with its previously announced five-year strategic plan.

This year, Petrobras had been expecting a production rise of more than 10%, but delays with starting up new platforms have left output so far in 2007 practically flat compared with last year's 1.78 million bpd.

Petrobras did not provide a proven national reserves level for 2007, but said the reserves, which stood at 13.75 billion barrels in 2006 under the Society of Petroleum Engineers criteria, should "maintain a continuous growing trajectory, now strongly boosted by recent discoveries in the Tupi area."

Petrobras last month announced a reserve estimate at the sub-salt Tupi field of between 5 billion and 8 billion barrels of light oil and gas, which, if confirmed, would make it the world's biggest deepwater discovery.

Petrobras wants to start a long-term production test there in early 2009 before it cranks up a 100,000 bpd pilot project in 2010 or 2011, Petrobras Chief Executive José Sérgio Gabrielli said on Wednesday, December 19, during a year-end reception.

Brazil became self-sufficient in oil in net terms last year, but it keeps importing some light crude to mix with the predominantly heavy local oil for refining. Petrobras sees average annual production growth of more 7% through 2012, when crude output should reach 2.42 million bpd.

Referring to last week's UBS report suggesting that Tupi may have an even larger neighbor, Gabrielli said it was based "on the same information we released when we announced the Tupi reserve" and that Petrobras had nothing to add so far.

It said then the area of potential further sub-salt oil reserves stretches for 800 km along the coast and that Brazil could jump from its 17th position in the ranking by reserves and overtake Nigeria, now No. 10 with 36.2 billion barrels, if more reserves are confirmed.

Next year Petrobras will launch a 180,000 bpd production platform on the Marlim Sul field and two units, with a capacity to pump 180,000 bpd and 100,000 bpd respectively, on the Marlim Leste field in the Campos basin.

It also plans to start up a 15,000 bpd production test rig on the Badejo field and a platform with a capacity to produce 10 million cubic meters of natural gas per day and 25,000 bpd of crude on the Camarupim field.

Mercopress

According to the company's press release, the drilling of a pioneer well (4-ESS-177) and an exploratory well (6-ESS-168) confirmed the Espí­rito Santo Basin's high potential for gas and light crude, which "is expected to result in increased recoverable volumes from the area."

The Camarupin field already accounts for a substantial part of the production plans under the Gas Production Anticipation Plan (Plangás).

The Pioneer well was drilled at a depth of 708 meters (2,323 feet) from the surface water, off the coast of Espí­rito Santo, and found 101-meter (331 feet) thick gas-saturated sandy reservoirs at a depth of 3,417 meters (11,211 feet).

The well is located in exploratory block BM-ES-5 operated by Petrobras (65%) and the Brazilian subsidiary of American outfit El Paso Corporation (35%).

In addition to the gas, the Pioneer well also detected light oil in shallower reservoirs, at a depth of 2,461 meters. This discovery also reinforces the major potential of prospects that have yet to be drilled in the same bloc

The emergence of a new reserve in the Espí­rito Santo field comes a month after a reserve of up to eight billion barrels was found nearby.

No figures have been put on the size of the latest discovery although Petrobras said it offered "high potential." The Brazilian leadership believes the country could in the near future become one of the world's top 10 oil producers.

Brazil currently has proven oil reserves of 14 billion barrels, more than half of which have been discovered in the past five years.

Mercopress

The discovery had already been announced by the company in July, but was confirmed this week following a test drill, proving that the oil is of good quality and the volume significant.

The discovery is of great significance as it is the first time an oil company discovers oil and gas below a layer of salt, which, according to the assessment of specialists, may open a "new exploration frontier".

The Petrobras release said the test drilling showed a flow of 4,900 barrels of oil and 150,000 cubic meters of natural gas per day. The block is operated by Petrobras (65%) in a consortium with British Gas (25%) and Petrogal from Portugal (10%).

The Santos basin crude is API 30 quality, which is far lighter, and of greater value, than the heavy oil extracted from Brazil’s main offshore Campos basin from where almost 80% of Petrobras production comes.

The discovery is within the scope of the state-owned company’s priority of investing in exploration and production in areas with a potential for discovery of light oil and natural gas, included in the company’s Business Plan, which forecasts investment of over 80 billion US dollars between 2007 and 2011, added the official release.

Petrobras, with a majority stake from the Brazilian government also has shares in the stock exchanges of Sao Paulo, New York, Madrid and Buenos Aires.

Petrobras ranks 12 among world oil and gas companies with private participation, has an estimated production of 1.9 million bpd and is considered a leader in deep sea exploration and production technology.

Mercopress

The discovery had already been announced by the company in July, and was confirmed yesterday, October 4, after a test well was drilled, proving that the oil is good quality and that the volume is significant.

The discovery is of great significance as it is the first time an oil company discovers oil and gas below a layer of salt, which, in the evaluation of specialists, may open a "new exploratory frontier".

According to the statement, the test executed on a vertical well showed a flow of 4,900 barrels of oil and 150,000 cubic meters of natural gas per day. The block is operated by Petrobras (65%) in a consortium with BG (25%) and Petrogal (10%).

The company admitted the need for additional investment, initially for the drilling of the first extension well, for the complete evaluation of the volume of the oil reserves found.

The discovery is within the scope of the state-owned company’s priority of investing in exploration and production in areas with a potential for discovery of light oil and natural gas, included in the company’s Business Plan, which forecasts investment of over US$ 80 billion in the period between 2007 and 2011.