Minister says there's a possibility of more stringent offshore drilling regulations

Brazil's Mines and Energy Minister, Marcio Zimmermann, has made an official statement saying that the spill in the Gulf of Mexico, has been a misfortunate accident, but one that has prompted Brazilian government to contemplate the possibility of imposing more stringent regulations in the country's offshore drilling sector.

Speaking to reporters, after an event at the World Expo, Zimmermann said that Brazil will be able to export around 20 million barrels of oil per year by 2019, and confirmed that the country has received $6-$7 billion of oil-for-loan deal from China in 2009.

In that same year, Petrobras received a $10 billion credit deal from China Development Bank, in exchange for a 10-year oil supply agreement with China Petroleum and Chemical Corp.

Chemical Corp has received 150,000 barrels of crude oil a day in the first year; the quantities are set to rise to 200,000 b/d in the next nine years. Petrobras plans to invest $118.8 billion in exploration and production in the next four years, with $30.9 billion designated for offshore oil development.

Source: Wall Street Journal

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OXG discovers crude oil off Brazil's coastline

OGX has announced that it has discovered signs of crude oil off Brazil's coastline, and that it intends to start producing in 2011 at a rate of about 20,000 b/d.

The discovery was made in the BM-S-29 block in shallow waters of the Santos Basin, about 130km off the coast of Sao Paulo. Brazilian billionaire, Eike Batista,who owns 62 per cent of OGX, has said that he will put in $4 billion into the operation, and expects to see first output toward the end of 2011.

Talking about OGX's plans, chief executive, Paulo Mendonca, said that the company is actively "studying the whole of Brazil for new acquisitions," and that even though OGX is "a long way off pre-salt," it awaits the right opportunity to "re-enter the pre-salt" sector.

The new discovery promises to be a success, with projected output expected to grow to 730,000 b/d in 2015, and subsequently to 1.4 million. According to Batista large international oil companies, including several from China, have approached OGX about the possibility of partnering up for oil drilling.

"The Chinese are interested in investing in the offshore subsalt oil area in Brazil. They've already taken a look at it," Batista told reporters at an event in Rio de Janeiro.

Source: Bloomberg

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