Repsol-YPF Finds New Offshore Well

By Bruno De Nicola, Contributing Reporter

RIO DE JANEIRO – Spain’s oil giant, Repsol, announced last week the discovery of a new offshore oil well in the BM-S-48 Block of the pre-salt area, around 257 kilometers off the São Paulo state coast, in the Basin of Santos. Vampira is the Spanish company’s fourth discovery this year, creating a total of six findings in Brazilian waters and following those of Guarà, Carioca, and Iguaçu Norte in the BM-S-9 Block.

Repsol-YPF is an international integrated gas and oil company operating in thirty countries around the world and leads the market in Spain and Argentina. It is one of the biggest private oil companies in the world and the energy-related business with the largest revenue in Latin America. The corporation is also the operator responsible for the BM-S-48 Block as it controls over forty percent of the oil extraction consortium along with Petrobras (35%), Woodside (12.5%) and Vale (12.5%).

After preliminary analysis, two samples taken at the end of July 2009 at a depth of around 4,800 meters proved the presence of light petroleum and rich gas in the area. However, information about the quantity of oil contained in the block will only be available after test results.

Repsol’s drilling campaign started in September 2008 with the Panoramix well and continues with the installation of the Vampira drilling station. Operations will probably stop for further logistic and scientific preparation and will then be fully resumed by the consortium in the next trimester.

The Spanish oil company appears very interested in Brazilian oil: successful drilling operations in the Santos Basin are part of the corporation’s ten main strategic goals for the 2008 to 2012 period. Undoubtedly, the pre-salt area’s great oil extraction potential represents the best growth opportunity in the world for Repsol and many other petroleum-related companies.

The future of multinational companies in the area is still quite uncertain, however. Over the past few months the pre-salt concession’s matter has been constantly discussed by the Brazilian government, yet no satisfactory resolution has been found.

Geologist and UFRJ (Federal University of Rio de Janeiro) professor, Giuseppe Bacoccoli has spent many years working for Petrobras and is well-acquainted with the Brazilian oil market. He stated, “there is a very relevant foreign presence in the pre-salt area; some of them Petrobras’ partners, some independent drilling operators.”

Repsol is the first foreign company in Brazil in terms of offshore drilling concessions in the bays of Santos, Campos and Espirito Santo. The Spanish company is active in twenty-four blocks, eleven of which are completely under its control.

The corporation is followed by a long list of international players, who, like Repsol, deal in pre-salt ventures. Among them are America’s Exxon, SK Energy from South Korea and Shell, BG and BP from the UK. Galp, from Portugal, and BP were the first foreign companies to benefit from offshore oil extraction in the pre-salt area.