SAO PAULO, Brazil – Brazil's state oil company said Thursday that it has discovered as much as 8 billion barrels of light crude in an ultra-deep field off the coast of Rio de Janeiro, an amount that could help transform the country into a major world oil exporter.
Petroleo Brasileiro SA's announcement that the Tupi field has between 5 billion and 8 billion barrels of recoverable light oil sent Petrobras shares soaring 26 percent in New York, to a close at a new 52-week high.
The sheer magnitude of the find suggests Brazil could transform itself from a medium-level oil producer "to another level, like Venezuela, Arab nations and others," said presidential chief of staff Dilma Rousseff.
"This has changed our reality," she said, adding that the amount in the Tupi field could represent 40 percent of all oil ever discovered in Brazil.
Brazil became a net exporter of oil last year, but must still import light crude oil for the refined products it needs. The country produces — and exports — mostly heavy crude oil, which has to be mixed with the light oil in refineries.
The oil in Tupi and potentially in other fields nearby could drastically change Brazil's role in the world's oil business, where "the game is to become a petroleum exporter," she said.
The Tupi field lies under 7,060 feet of water, almost 10,000 feet of sand and rocks, and then another 6,600-foot thick layer of salt.
Getting the oil out will be a formidable challenge. It will take years because the petroleum is so deep under the earth's surface, meaning any impact on oil prices probably won't come soon. Petrobras, however, has become well-known over the last decade for its experience in extracting oil from extremely deep reserves.
The company's Brazilian oil and gas reserves stood at 10.573 billion barrels of oil equivalent at the end of 2006, according to the measuring criteria used by the U.S. Securities and Exchange Commission.
"If recoverable oil and gas volumes for the pre-salt reservoirs are confirmed, they will significantly raise the quantity of existing oil in Brazilian basins," Petrobras said in a statement.
Petrobras President Sergio Gabrielli said the oil from ultra-deep areas would give Brazil the world's eighth-largest oil and gas reserves.
"Brazil's reserves will lie somewhere between those of Nigeria and those of Venezuela," Gabrielli said at a news conference.
Felipe Cunha, an oil analyst with the Sao Paulo-based brokerage Brascan, said the best news for Brazil is that the Tupi field guarantees Brazil's oil output will continue to grow.
"If the best-case scenario happens, this discovery would make Petrobras' reserves overcome those of Shell and Chevron, and put Petrobras behind only Exxon and British Petroleum," Cunha said.
Petrobras has a 65-percent operating stake in the field, Britain's BG Group PLC holds 25 percent, and Petroleos de Portugal holds the remaining 10 percent.
The company made the estimate of reserves after analyzing tests at wells drilled at the Tupi field that lie under 7,100 feet of water, 177 miles south of Rio de Janeiro.
Petrobras' American depository shares jumped $24.03 to $116.77 on the New York Stock Exchange. Before the announcement, Petrobras shares had traded in a 52-week range of $41.38 to $97.28.