July 4, 2008 / 2:48 PM / 12 years ago

Galp: Brazil Santos Basin is new North Sea -report

SAO PAULO, July 4 (Reuters) - Brazil’s Santos Basin, which may have yielded the world’s biggest deep-water oil find some months ago, is a “new North Sea” for Manuel Ferreira de Oliveira, the president of Portugal’s Galp Energia, which has a stake in the find.

Galp shares (GALP.LS) have been boosted by the announcement of the subsalt Tupi find, estimated to contain between 5 billion and 8 billion barrels of recoverable reserves, last November and then reinforced by finds at three other subsalt areas, where reserve estimates are not yet available.

“Santos basin is the new North Sea of the South,” Valor Economico business newspaper on Friday quoted de Oliveira as saying.

De Oliveira said that Galp, although smaller than its Tupi partners, Brazil’s state-run oil giant Petrobras (PETR4.SA)(PBR.N) and Britain’s BG Group BG.L, will meet its investment targets under this and other projects.

“For good projects, there is no lack of money,” he said. “Galp Energia is not selling any exploration and production assets in Brazil. On the contrary, we are available to participate in new projects.”

In the subsalt cluster, Galp has a 10 percent stake in Tupi, 14 percent in Bem-Te-Vi, 20 percent in Caramba and 20 percent in the natural gas field known as Jupiter.

Apart from these deep-water blocks, it also is a partner in 41 blocks in the Espirito Santo, Potiguar and Sergipe-Alagoas basins, holding operating rights in 26 areas.

Some geologists estimate the so-called Sugar Loaf subsalt formation not far from Tupi may contain over 30 billion barrels of oil, while the whole subsalt belt along Brazil’s southern shore encompassing three basins could hold over 70 billion barrels. Bem-Te-Vi and Caramba make part of the Sugar Loaf structure.

If confirmed, Tupi could be one of the world’s biggest oil finds in the past two decades and the biggest ever in deep waters. In the past year, Brazil has emerged as a major world oil province

In March of 2009, a long-term production test is to start on Tupi to produce 20,000 to 30,000 bpd, which will then develop into a 100,000 bpd pilot project. (Reporting by Andrei Khalip; Editing by Diane Craft)

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