Repsol, Sinopec in huge oil discovery

Spain’s Repsol and China’s Sinopec have made an oil discovery offshore Brazil that could be one of the biggest so far in the area and that boosted confidence that Angola’s deepwater reserves may be abundant too. The firms’ Brazilian joint venture has struck oil in the Campos Basin off the coast of the Latin American country, it said on Monday. “The well ... drilled into a hydrocarbons column of 500 metres, one of the thickest discovered in Brazil to date,” Repsol said in a statement. Brazil is at the centre of an oil boom, with majors flocking to Latin America’s largest economy and its hydrocarbon reserves, considered among the biggest in the world. Repsol did not provide an estimate for the size of the find, but one of its partners, Norway’s Statoil, said it was a “high-impact” one: it could hold more than 250 million barrels of oil equivalent (boe) or provide 100 million boe net to Statoil. One analyst said the discovery could be even bigger and had the potential to be an elephant when compared with a recent discovery made by Petrobras  in the same area. “Using the same ratio between the oil column size and the recoverable recourses, the estimated size of (the find) is in excess of 500 million boe,” Teodor Sveen Nilsen, an analyst at Oslo-based firm Swedbank First Securities, wrote in a note to clients. The partners in the Brazilian discovery, called Pao de Acucar or Sugar Bread, are Repsol Sinopec Brasil, the well’s operator with a 35 per cent stake, Brazil’s Petrobras with 30 per cent and Statoil with 35 per cent.  Repsol has a 60 per cent stake in the Brazilian joint venture, while Sinopec holds 40 per cent. Shares in Repsol and Statoil were up 0.63 per cent and 1.46 per cent at 0949 GMT respectively, outperforming a flat European oil and gas index. Nilsen said the find was worth at least 0.6 crown per Statoil share now and could be worth 1.0-1.2 crown per share were the find to be an elephant. Statoil said the Brazilian find was the sixth high-impact find it had made over the past 12 months after it struck big offshore Tanzania, Brazil, in the North Sea and in the Arctic.