Whitley blog

Repsol reports new Brazilian offshore oil discovery

MADRID (AFP) – Spain?s biggest oil company, Repsol YPF SA, announced Wednesday it had discovered "high quality crude" off the coast of Brazil in partnership with Britain's BG Group and Brazil's Petrobras.

The find was made in "ultra-deep waters" in the Santos Basin in the Carioca Northeast well in block BM-S-9, approximately 275 kilometres (170 miles) from Sao Paulo, the company said in a statement.

"Preliminary analysis shows a reservoir of 200 metres containing high quality crude. Brazil?s offshore is one of the world?s fastest-growing hydrocarbons reserves," the statement said.

Petrobras has a 45 percent stake in the discovering consortium and is its operator, BG Group owns 30 percent and Repsol holds the remaining 25 percent through a joint venture with Sinopec, one of China's top oil companies.

Last month Repsol shareholders approved the sale of 40 percent of its Brazilian affiliate to Sinopec for 7.1 billion dollars (5.2 billion euros).

The deal, which was first announced in October, provides Repsol with funds for development of oil fields in Brazil and created one of Latin America's largest energy companies, valued at 17.8 billion dollars.

Under the agreement, Repsol and Sinopec will continue with expansion plans in Brazil and participate, jointly or separately, in future rounds of tenders in the country.

Repsol has a significant portfolio of projects in Brazil, including a producing field, a block under development, two planned pilot projects and 14 exploration blocks of great potential.

Shares in Repsol rose 2.69 percent to 22.705 euros in early afternoon trade, outperforming the benchmark Ibex-35 index of most traded shares which gained 0.99 percent.