PetroBras Discovers Huge Natural Gas Field!!!

Petroleo Brasileiro SA, Brazil's state-controlled oil company, and Portugal's Galp Energia SGPS SA discovered a natural gas field that may be as big as Tupi, one of the world's biggest finds of the past 30 years.

The discovery, known as Jupiter, is beneath more than 5 kilometers (3.1 miles) of ocean and seabed and contains natural gas liquids known as condensate as well. It's located about 290 kilometers (180 miles) off the coast of Rio de Janeiro state, 37 kilometers from the Tupi field, Rio de Janeiro-based Petrobras said in a statement today sent by e-mail.

The find, if it contains as much gas and oil as Tupi, would be the second giant strike reported by Petrobras in the past 10 weeks. The Tupi field, disclosed Nov. 8, has as much as 8 billion barrels of oil and gas, three quarters of the reserves of Kazakhstan's 12-billion-barrel Kashagan field. Kashagan was the largest oil discovery in the last three decades.

``This find makes it clear that what we have in Brazil is another huge geological basin,'' John Parry, senior analyst with Jonn S. Herold Inc., a Norwalk, Connecticut-based energy research unit of Denver-based IHS Inc., said in a telephone interview. ``As they say the best place to find oil and gas is usually right near where you've already found it.''

U.S. Supplier

Petrobras, which owns 80 percent of Jupiter and operates the well, said the oil bearing rock is more than 120 meters wide, suggesting that ``the area of this structure could have dimensions similar to Tupi.''

Lisbon-based Galp, which also holds a stake in Tupi, owns 20 percent.

Should the estimates for Tupi and Jupiter be confirmed, it would more than double Petrobras's 11.7 billion barrels of reserves, according to U.S. Securities and Exchange Commission standards.

Brazil's discoveries may result in the country overtaking such producers as Venezuela and Mexico and becoming a major supplier to the U.S., Parry said.

``It is conceivable that after 2010 or 2012 you could see Brazil and Petrobras matching Venezuela and exceeding them,'' he said. ``Brazil would become an important producer in the western hemisphere and you would have a natural market to the U.S.''

A Tupi sized field would likely produce about 1 million barrels a day in 5-to-10 years, he said.

Petrobras worldwide operations produced an average 2.37 million barrels of oil and natural gas equivalent a day in December, according to Petrobras' Web site. Brazilian output was an average 2.3 million barrels a day, 80 percent from its offshore Campos and Santos basins.

The Jupiter well is in the BM-S-24 exploration block in Brazil's offshore Santos Basin. As with Tupi, the hydrocarbons are in rock formations beneath a layer of salt.

Petrobras preferred shares, the company's most-traded class of stock, fell 5.33 reais, or 7.4 percent, in Sao Paulo. Trading ended before the Jupiter announcement was made. Galp fell 65 centavos, or 4.6 percent to 13.65 euros in Lisbon before the announcement.