Petrobras Finds Signs of Large Oil Deposits Near Tupi

Petroleo Brasileiro SA has found signs of large oil deposits near its Tupi field, the largest Western Hemisphere oil discovery since 1976, the state- controlled company's chief executive officer said.

``Today we have information about the areas and the indication of the existence of hydrocarbons,'' Jose Sergio Gabrielli, Rio de Janeiro-based Petrobras' chief said in a Bloomberg TV interview at the World Petroleum Congress in Madrid. ``We're certain of a huge increase in reserves.''

Discoveries near Rio de Janeiro and Sao Paulo including Tupi will at least triple Brazil's oil reserves, Brazilian President Luiz Inacio Lula da Silva told Bloomberg in June. Petrobras has about 13 billion barrels of proved reserves.

Petrobras found more oil accumulations in the basin, including Tupi-sized accumulations of natural gas and oil in its Jupiter field, and hasn't been able to quantify the total amount of reserves, Gabrielli said.

The company hasn't yet determined if the finds are separate fields or one larges discovery, he said. Under Brazilian law, if the field extends beyond the lease boundaries of a single company or exploration group, the participants must agree to develop the deposits jointly.

Tupi has as much as 8 billion barrels of recoverable oil equivalent, Petrobras said in November. The entire pre-salt region may contain as much as 50 billion barrels of oil, according to Peter Wells, director of U.K. research firm Neftex Petroleum Consultants Ltd.

15-Year Supply

Tupi may hold enough oil to supply every refinery on the U.S. East Coast for 15 years.

Petrobras preferred shares, its most-traded class of stock, fell 2.11 reais, or 4.6 percent, to 43.98 reais in Sao Paulo.

Petrobras said last year that it plans to spend $112 billion in 2008-2012 to expand production. The plan, announced before Tupi and other pre-salt discoveries were announced, may have to be expanded to meet the development needs of the oil province.

A new plan to include pre-salt development is expected to be announced in August or September, Gabrielli said.

Petrobras owns 65 percent of Tupi and operates the concession. Reading, U.K.-based BG Plc owns 25 percent and Lisbon-based Galp Energia SGPS SA owns 10 percent.

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