Repsol Pursue Brazil’s Pre-Salt Oil

By Jewellord T. Nem Singh, Contributing Reporter

RIO DE JANEIRO – Petrobrás announced the discovery of new oil deposits on June 23rd in the offshore Albacora Leste field in the Campos Basin, Rio de Janeiro. Located 130 kilometers off the coast at a depth of 1,956 meters, the exploration of this “pre-salt” reservoir is operated through a ninety-ten percent joint venture between state-owned Brazilian Petrobrás and Spanish giant Repsol.

Like many foreign firms, Repsol continues to try and get control of new concessions in the lucrative pre-salt basins off Brazil. Its main operations extend to upstream, downstream and natural gas liquefaction (NGL) activities, with a strong presence in Africa, Europe, Northern America, Central Asia, and Latin America. Within the latter region its upstream activities cover most resource extractive economies, but in particular Argentina, Bolivia, Venezuela and Brazil. Repsol also operates five refineries in Spain and Portugal and overall it currently has operations at various stages of petroleum production in thirty countries.

Within Brazil, Repsol’s main explorations are in the Santos basin, where it holds a 25 percent share in the BM-S-10 Block and as announced in April, Repsol expects the Guara area to produce 250,000 barrels of oil by 2016. The North and South Guara, foreseen to start its output by 2016 and 2013 respectively, are being operated by a consortium of three companies; Repsol holds 25 percent, BG Group has 30 percent share, and Petrobrás has the majority with a 45 percent stake. Whilst the final decision has yet to be made on any production, it looks certain that Repsol will make the necessary financial investments in Rio de Janeiro’s pre-salt basins by the end of 2010.

In the same block, the firm foresees extraction with an output of 110,000 barrels per day and an overall estimate of 131million barrels by 2019. But it is not just in Brazil that the company is making substantial investments.

The recent expansion of mining and oil extraction elsewhere in Latin America has attracted foreign firms such as Repsol to invest heavily in its operations in the region. Despite the recent nationalizing moves from the Venezuelan government, Repsol expects to make investments in upstream activities in their Carabobo oilfields in 2014. This reservoir is expected to hold around 400,000 barrels per day of output by 2018 and the prediction is that it will increase oil reserves by a total of 268million barrels. The recent estimates in Venezuelan oil reserves has also helped Respol decide to go into a consortium with Italian firm Eni Spa and state-owned PdVSA to start up exploration in other areas.

In terms of downstream industry, Repsol also manufacture refined petroleum, lubricants, combustibles, asphalt and other specialized oil products. Its technological expertise is far beyond solely exploring and extracting underwater oil deposits, which signifies its capacity to add value to the commodity chain.