Repsol YPF makes discovery off Brazil

Repsol YPF told Brazil's hydrocarbons regulator Agencia Nacional do Petroleo it discovered hydrocarbons on BM-S-48 block in the Santos basin, 185 km off Sao Paulo state.

Jan 15th, 2009

Eric Watkins
Oil Diplomacy Editor

LOS ANGELES, Jan. 15 -- Repsol YPF SA told Brazil's hydrocarbons regulator Agencia Nacional do Petroleo (ANP) it discovered hydrocarbons on BM-S-48 block in the Santos basin, 185 km off Sao Paulo state.

"Repsol has found traces of hydrocarbons at Panoramix well in the Santos basin in Brazil," said a spokesman for Repsol YPF, which is operator with a 40% share in BM-S-48.

Other stakeholders include Petroleo Brasilerio SA (Petrobras) 35%, Woodside Petroleum Ltd. 12.5%, and Brazilian mining firm Companhia Vale do Rio Doce 12.5%.

Repsol YPF said the discovery was made at 3,760-4,602 m in the Panoramix well. Further tests will be conducted to characterize properties and potential volume of the hydrocarbons detected.

Opportune discovery
The discovery comes at an opportune time for Repsol YPF officials who in November expressed concern over the company's drilling plans for Brazil due to the global financial crisis.

Repsol YPF Chairman Antonio Brufau agreed with Petrobras Pres. Sergio Gabrielli a minimum oil price of $50/bbl is necessary to make projects viable in the Santos basin. In a speech at the Latibex Forum in Madrid, Brufau said risk premiums for financing energy projects in Latin America have increased, and some projects in the region could become unviable.

Earlier in November, Repsol YPF Chief Operating Officer Miguel Martinez said the firm could scale back plans for exploration off the coast of Brazil due to declining oil prices.

At the time, Martinez said that Repsol YPF was still working on its budget for 2009, and was trying to drill eight wells in Brazil, but that a "different price scenario" could change the firm's plans.

Contact Eric Watkins at hippalus@yahoo.com.

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