Videocon-BPCL JV with Petrobras find more oil in Brazil

Sao Paulo: Brazil’s state-run oil company Petroleo Brasileiro SA (Petrobras) and its Indian partners—Videocon Industries Ltd and Bharat Petroleum Corp. Ltd (BPCL)—have found more light crude oil in the Sergipe Basin off Brazil’s Northeast coast, according to a securities filing on Thursday.

The discovery in the BM-SEAL-11 exploration block is one of several in recent years in an area believed to hold more than 1 billion barrels of recoverable oil, or enough to supply all needs in the US for nearly 2 months.

Petrobras owns 60% of BM-SEAL-11 and is the operator. IBV Brasil SA owns the rest. IBV is a 50-50 joint venture between Videocon and BPCL.

The securities filing said drilling in the 9-BRSA-1280D-SES well on the Farfan prospect found a new 28-meter column of oil. It also confirmed the presence of light crude at density of 37 to 40 degrees on the American Petroleum Institute Scale first announced in 2013.

The discoveries also include natural gas. Farfan is located 107km east of Aracaju, the capital of Brazil’s Sergipe state, the filing said.

The BM-SEAL-11 exploration block is the biggest new oil offshore frontier in Brazil since giant discoveries in the Santos Basin south of Rio de Janeiro were announced in 2007.

Petrobras has said it plans to start producing oil in the area in 2018. The company, though, said in December that many of its plans may be revised as a giant corruption scandal delays release of its third-quarter results, puts it at risk of breaking debt covenants and shuts it out of capital markets.

While Petrobras says the BM-SEAL-11 discovery is large, the company has refused to release a resource size estimate.

The 9-BRSA-1280D-SES well was drilled by the Deepsea Metro II, a dynamic-positioned drill-ship owned by Greece’s Metrostar Management Corp. and Bermuda-based Norwegian drillers Odfjell Drilling Ltd, the filing said.

Bharat Petroleum