Alan von Altendorf

BG Group Makes Progress in Pre-Salt Brazil

July 22 (Bloomberg) -- A Brazilian oil well drilled by Exxon Mobil Corp in the country’s so-called pre-salt offshore fields showed no sign of oil.

July 23 (Reuters) -- Petrobras said it had to halt production at a well in the Tupi field because of an equipment problem. It did not say when the well would be functioning again.

August 24 (news wires) -- BG Group said that wireline logs at the Corcovado-2 prospect in the BM-S-52 exploration block failed to test positive.

August 27 (Upstream) -- Petrobras has drilled a duster in the much-touted exploration fairway. Petrobras drilled the wildcat to a total depth of 6375 metres in ultra-deep water Block BM-S-17 in mid-August and no discovery notice was filed, a well-placed source at the country’s National Petroleum Agency told Upstreamonline, speaking in condition of anonymity. “The BM-S-17 prospect was a dry hole. That’s the evaluation inside the ANP,” said the source, adding the block is located a few kilometres south-west of BM-S-22, which is in the heart of the giant Sugarloaf pre-salt structure.

If confirmed, it will be third dry well spudded in the Santos basin pre-salt cluster in less than 60 days.

Two Exciting Brazilian Oil Stocks

"a million barrels a day from the ten platforms PBR has ordered"

Can't and won't happen, for several reasons. It's misleading to talk about barrels of oil. Think BOE barrels of oil equivalent, because it's going to be mostly sour gas and condensate loaded with sulphur and CO2. Consider that Petrobras has very little free cash flow, so they need Lula to finance construction, and Lula decreed 80% new local employment, new shipyards, new drydocks, newly trained electricians and welders, green rig workers, all unionized. Expect surprises when they try to launch and operate those homemade pipebombs after a long string of delays. But really the meat of the story is nonexistent reserves and BG's political involvement in Brazil.

I get tired of pointing out the obvious.