Petroleo Brasileiro SA (PETR4), the biggest crude producer in waters deeper than 1,000 feet, rose the most in a week after finding “good quality” oil at the third well it drilled in a $42.5 billion exploration zone off the coast of Brazil.
Petrobras, as the Rio de Janeiro-based producer is known, rose 1.7 percent to 20.22 reais at in Sao Paulo, the biggest gain in a week. The stock has dropped 7.3 percent for the year to date, compared to a 0.9 percent gain in the benchmark stock index.
The state-controlled producer completed drilling a well to the south of the Sapinhoa field, previously known as Guara, in deep waters of the Santos Basin where the company found a layer of oil 93 meters (305 feet) thick, the company said today. The announcement encouraged investors who were disappointed with a drop in June production, said Bruno Piagentini Caloni, an analyst at brokerage Coinvalores.
“It’s a sign that Petrobras could increase production from this area,” Caloni said in a telephone interview from Sao Paulo. “It’s a switch in the focus.”
The well was drilled in an area where Petrobras bought the rights to produce as much as 5 billion barrels of oil from the government in 2010 as part of a $70 billion share sale. The area includes the Franco and six other fields in the so-called pre- salt region and will account for 19 percent of Petrobras’s domestic oil output in 2020, according to its business plan.
In 2010 Petrobras said Franco had an estimated 3.1 billion barrels of recoverable oil, compared with 6.5 billion barrels at Lula, the largest discovery in the western hemisphere since Mexico’s Cantarell in 1976.
To contact the reporter on this story: Peter Millard in Rio de Janeiro at email@example.com
To contact the editor responsible for this story: James Attwood at firstname.lastname@example.org