Petrobras, Brazil's state-owned oil company has decided to invest in oil fields recently discovered under several kilometers of sea water. To obtain the oil it must drill into a hard-to-penetrate layer of salt. So far, no estimate of the size of the find has been made, however some say that the reserve may contain as much as 100 billion barrels. At present, Brazil has proven reserves of 14.4 billion barrels.
Petrobras plans to invest $174.4 billion over the next four years, including $28 billion on the new fields.
Last week Exxon Mobil (NYSE: XOM) and Hess (NYSE: HES) announced the discovery of oil in a pre-salt field. Exxon Mobil and Hess each own 40% of the partnership and Petrobras owns 20%. Petrobras also owns two nearby fields at Tupi with estimates of 5 billion barrels and 8 billion barrels respectively.
Brazil is moving forward aggressively with plans to increase oil and natural gas production. This year it has set a target of $28.6 billion.
With all of the turmoil over OPEC and Middle East oil, this discovery could ease world oil supply-demand pressures.
What are your thoughts on these developments?
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