Brazilian Oil Producer Finds As Much As 2 Billion Barrels Offshore

Todd Shriber
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Brazilian oil producer OGX Petroleo & Gas Participacoes SA announced it may have made its biggest discovery to date, saying it found up to 2 billion barrels of recoverable crude off Brazil's oil-rich coastline. The 1-OGX-2A-RJS well in the BM-C-41 block off Brazil?s coast has an estimated 1 billion to 2 billion barrels, the company said.

Hydrocarbons were spotted in five sections of the well, indicating high-quality reservoirs, according to a report by Bloomberg News. OGX is controlled by Brazilian billionaire Eike Batista. The company went public in 2008 with a $3.3 billion IPO aimed at creating a true rival to Petrobras (PBR), the giant state-run Brazilian oil producer. OGX does not have shares listed in the U.S.

OGX owns all of the BM-C-41 block in the Campos Basin, where 85% of Brazil's oil is produced. OGX said in October that its BM-C-43 block, also in the Campos Basin, may hold between 500 million and 1.5 billion barrels of crude, Bloomberg reported. The company is in the process of moving a rig there to start drilling a new well before the end of 2009.

OGX is planning to drill 79 wells by 2013 and has estimated its potential resources at 6.7 billion barrels of crude and equivalents, according to Bloomberg. OGX shares have risen nearly three-fold in 2009.