Petrobras Finds Oil for First Time in BM-S-17 Block

Dec. 9 (Bloomberg) -- Petroleo Brasileiro SA, Brazil’s state-controlled oil producer, found evidence of oil in an offshore block in the country’s southeastern Santos Basin for the first time.

Petrobras, as the Rio de Janeiro-based company is known, notified the find in its BM-S-17 block to the National Petroleum Agency on Nov. 30, according to the regulator’s Web site. The block is in the so-called pre-salt area.

Latin America’s biggest company is investing billions of dollars to boost production by more than half and develop the Tupi field, the Americas’ largest oil discovery in more than three decades. The importance of BM-S-17 will hinge on whether its commercially viable, SLW Corretora analyst Erick Scott Hood said.

“Now the market will wait for information on whether the well is commercially viable,” Hood said in a telephone interview today from Sao Paulo.

Petrobras rose 18 centavos, or 0.5 percent, to 37.77 reais at 2:40 p.m. in Sao Paulo. The stock has gained 65 percent this year.

This was the first well to be drilled in the BM-S-17 block, ANP, as the regulator is known, said.

A Rio de Janeiro-based Petrobras spokeswoman, who can’t be named under company policy, couldn’t immediately confirm how much the block holds. An ANP spokeswoman, who also can’t be named, said there’s no deadline for the company to announce the commercial viability of the block.

Yesterday, the Brazilian oil company said tests confirmed the existence of light oil in the Iara field in the Santos Basin. Petrobras kept its estimate of as much as 4 billion barrels of recoverable light oil and natural gas in the area.

Petrobras aims to increase total output to 3.7 million barrels a day by 2013, from 2.4 million in 2008.

Lucia Kassai