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Brazil Hesitates on Deepwater Drilling

| Thursday June 24th, 2010 | 0 Comments

(courtesy Stratfor)

A planned stock offering to raise money for deepwater drilling by Brazilian state oil firm Petrobas has been delayed until September.

Petrobas said the delay was necessary to allow Brazil’s energy regulator, ANP, more time to assess the value of the oil deposits, according to the Guardian.

But the announcement comes as the BP deepwater spill in the Gulf of Mexico continues to send shudders through the international oil industry – and specifically the deepwater drilling sector. Just last week the CEO of ExxonMobil testified before Congress that the industry is “not well equipped” to handle deepwater spills.

The Brazilian fields are also exactly the type of next-generation oil finds – exploitable only with advanced technologies – that led many in the industry to pooh-pooh concerns over “peak oil.” But if such fields prove either too risky or too expensive to exploit, it might bolster the arguments of those who see a looming oil shortage.

OOOIIILLLL!*

Beginning in 2007, prospectors discovered a series of enormous oil fields off the coast of Brazil, known as pre-salt oil fields, which are now estimated to hold 30 billion barrels of oil. One of them, the Tupi field, is considered to be the largest oil find in the Western Hemisphere in the last 30 years.

But the oil lies approximately 5.6 miles from the surface of the ocean, under 1.2 miles of water, 3.1 miles of solid rock and another 1.2 miles of unstable salt deposits. By comparison, the Macondo field currently spewing into the Gulf is under less than a mile of water.

Last week the Global Renewable Fuels Alliance (GRFA) named Tupi one of the 10 most dangerous offshore sites in the world, the Guardian reported.

Ironically, the BP disaster could make Brazil’s fields even more valuable, if offshore drilling in the US is permanently curtailed following the Gulf spill (yesterday a federal judge overturned the Obama administration’s six month moratorium on offshore drilling; the administration plans to appeal the decision).

*(in honor of the World Cup)


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