Brazil oil news

Brazil Oil Regulator Wants Bloc Auction Speedup - EstadoWall Street Journal - USARIO DE JANEIRO (Dow Jones)--Brazil's oil regulator,the National Petroleum Agency, or ANP, wants to speed up the process for granting oil and gas exploration ...See all stories on this topic

Brazil Oil Co Petrobras Says Strike Not Affecting OutputWall Street Journal - USAThe Brazilian oil workers strike began at midnight Sunday and led to the total shutdown of production at the Manaus oil refinery in Amazonas State, ...See all stories on this topic

Brazil Petrobras Manaus Refinery Production Halted -StrikersWall Street Journal - USAThe platform is the first to produce oil from Brazil's giant sub-salt deposits. Another platform, PPR-1, producing natural gas in the same area, ...See all stories on this topic

Galp, Petrobras Find Evidence of Oil in Onshore Potiguar BlockBloomberg - USABy Joao Lima March 24 (Bloomberg) -- Galp Energia SGPS SA, Portugal’s biggest oil company, and Petroleo Brasileiro SA, Brazil’s state- controlled crude ...See all stories on this topic

Brazil Stocks Close Sharply Higher On Global RecoveryWall Street Journal - USAThe gains came despite a five-day job action kicked off Monday by Brazilian oil workers. Mining giant Vale do Rio Doce (RIO) was up 4.80% at BRL28.40. ...See all stories on this topic

Brazil stocks, real rally on US toxic asset planReuters - USA2 as investors snapped up state-run oil giant Petrobras, mining company Vale and local banking stocks. Financial markets rose around the world after the US ...See all stories on this topic

Brazil Stocks Gain on US Bank Plan, Mobius; Bolsa, Ipsa ClimbBloomberg - USAPetrobras, Brazil’s state-controlled oil company, climbed 6.1 percent to 30.86 reais. Mobius said he is “very bullish” on the company. ...See all stories on this topic

Argentina Peso Sinks Sharply As Bonds Tank,Stocks JumpWall Street Journal - USAAR), the local unit of Brazil's oil giant Petroleo Brasileiro (PBR), or Petrobras, led the gains by rising 9.80% to ARS2.24. It was followed by Petrobras, ...See all stories on this topic

Brazil oil news

Brazil’s Real Rises as Commodity Gains Overshadow GDP SlumpBloomberg - USACommodities such as crude oil rose today, increasing speculation that inflows from Brazilian exports will be robust. Nearly two-thirds of Brazilian exports ...See all stories on this topic

Brazil stocks gyrate, tracking volatile Wall StReuters - USA... March 9 (Reuters) - Brazil's stocks alternated between slight gains and losses on Monday, tracking a volatile New York market where a surge in oil ...See all stories on this topic

Mexico Is UBS’s Favorite Latin American Equity MarketBloomberg - USAThe companies in Brazil are in industries including mining, steel and oil that rely on global demand for commodities, they added. ...See all stories on this topic

Petrobras Finds Evidence of Oil in Onshore Reconcavo Basin WellBloomberg - USABy [bn:PRSN=1] Joao Lima [] March 10 (Bloomberg) -- Petroleo Brasileiro SA, Brazil’s state-controlled oil company, found more evidence of oil in an onshore ...See all stories on this topic

Anadarko Petroleum's Recent Exploration Success Is EncouragingSeeking Alpha - New York,NY,USARecent exploration success in the Gulf of Mexico, offshore Brazil and especially the Jubilee field offshore Africa are encouraging though not represented ...See all stories on this topic
China Splurges on Foreign OilRadio Free Asia - Washington,DC,USAOn Xi's next stop, one day after that, Brazil's Petrobras oil company agreed to sell China 100000 to 160000 barrels of oil per day to China National ...See all stories on this topic

Oil Shares, Natural Gas Stocks Lead Gains In SectorCNNMoney.com - USAShares of natural gas producers led gains in the energy sector, which drew strength from steady oil prices, a discovery by Anadarko Petroleum Corp. ...See all stories on this topic

Brazil oil news

Total confirms Nigeria Akpo oilfield startupReuters - USAThe operator of the field, Total, holds a 24 percent stake with Brazil's state-run oil firm Petrobras (PETR4.SA), NNPC, China's CNOOC (CEO.N) (0883. ...See all stories on this topic

Korea Moots Oil-for-Ships Bid in Brazil조선일보(영문판) - South KoreaKorea is hoping to participate in a large-scale oil field development project in Brazil, taking advantage of its successful shipbuilding industry. ...See all stories on this topic

* Bill aims to transform NNPC into profit-driven companyguardian.co.uk - UKThe reforms envisage a Nigerian oil company operating like former Brazilian oil monopoly Petrobras, Malaysia's government-owned Petronas, which has dozens ...See all stories on this topic

Sao Tome and Principe: PM Rafael Branco to discuss oil cooperation ...Macauhub - Macau,Macau"For a long time we have been working on a partnership with Brazil in the oil sector. We are going to dicuss that issue and boost that partnership,” the ...See all stories on this topic

Brazil to pump first Tupi oil in MayReuters - USAPetrobras said on Friday that it posted its largest-ever one-day output of Brazilian crude oil this week after several new platforms recently came on line. ...See all stories on this topic

Buy, Sell, or Hold: Profit From the Projected Oil-Price Rebound ...Money Morning - USAIndeed, when he recommended the Brazilian exchange traded fund - the iShares Brazil Index (NYSE: EWZ) - in late October, it zoomed 42% in six days. ...See all stories on this topic

Brazil oil news

Petrobras 4th-Quarter Profit Surges as Real’s Rate Lifts AssetsBloomberg - USANet income for Brazil’s state-controlled oil company increased to 7.36 billion reais ($3.08 billion), or 84 centavos a share from 5.05 billion reais, ...See all stories on this topic

Brazil Petrobras Set Daily Domestic Oil Prod Record On WedEasyBourse.com - Paris,FranceThe Campos Basin produces more than 80% of Brazil's crude oil. Petrobras' P-53 and "Cidade de Niteroi" platforms entered production in the Marlim Leste ...See all stories on this topic

Brazil stocks, currency creep higher, ignore dataReuters - USAOn the stock market, state-run oil company Petrobras (PETR4.SA) led the upside, tracking a recovery in oil prices. It surged 1.5 percent to 26.39 reais as ...See all stories on this topic

PetroChina, Petrobras pursue Aruba refinery-sourcesReuters - USASS) and Brazil's state-owned oil company Petrobras (PBR.N) (PETR4.SA) were seen as potential bidders for Valero Energy Corp's (VLO.N) refinery in Aruba, ...See all stories on this topic

STOXX Ltd. Announces Results of Regular Annual Review of Dow Jones ...MSNBC - USATO) and Petroleo Brasileiro S/A (Brazil, Oil & Gas, PETR4.BR) will be deleted from the Dow Jones STOXX Grand Prix Index because they no longer supply or ...See all stories on this topic

Brazil to Start Drilling in Giant Offshore FieldLatin American Herald Tribune - Caracas,VenezuelaBrazilian state oil giant Petrobras says that Tupi and two other pre-sal fields – all three in the Santos basin off the country’s southeastern coast ...See all stories on this topic

Brazil oil news

ExxonMobil VP: Will Soon Drill 2nd Well At BM-S-22 In BrazilCNNMoney.com - USA(XOM) will "shortly commence operations" on a second well at a recently announced oil discovery offshore Brazil , Senior Vice President Mark Albers said ...See all stories on this topic

Brazil's Petrobras Studies Colombia's Cartagena Refinery-ReportCNNMoney.com - USABOGOTA -(Dow Jones)- Brazilian state-controlled oil company Petroleo Brasileiro SA (PBR), or Petrobras, is studying whether to buy a 51% stake in Colombia's ...See all stories on this topic

MODEC FPSO achieves first oil in BrazilOil Online - TX,USA... Inc. "We have invested in Brazil and the results are very rewarding. We are excited about achieving first oil on FPSO Cidade de Niteroi MV18 and look ...See all stories on this topic

Braskem Posts Loss of 2.11 Billion Reais on CurrencyBloomberg - USABrazil’s real plunged 23 percent in 2008, increasing costs of Braskem’s dollar debt and leading to a 1.9 billion-real currency loss in the quarter. ...See all stories on this topic

Brazil dev. bank to finance Petrobras in '09/10Reuters - USALast month Petrobras said it expected to conclude a deal with China for a $10 billion line of credit in exchange for future oil supplies. ...See all stories on this topic

Chile, Argentina battle British in AntarcticaWAND - Decatur,IL,USA... which is claiming oil and gas drilling rights on the same slices of territory. Other nations with claims include Russia, Brazil, Australia, Ireland, ...See all stories on this topic

State emissions proposal quickly attackedSan Francisco Chronicle - CA, USA"There are some instances where the production of certain fuels - such as sugar cane in Brazil or palm oil in other parts of the world - replaces food ...See all stories on this topic

Understanding the risk and company evaluation Part 1

Don’t you hate it when you just can’t work out what an announcement means? And doesn’t it just drive you nuts when you’re buying while the rest of the market is selling? Or just as bad you are selling when the rest of the market is buying. And what the hell does a flow-rate of X amount mean to the stock price anyway.
Well you’re not alone and with ERH about to hopefully unveil some cracking results (fingers, toes and eyes crossed) I thought that this would be the perfect time to cover some basic valuation methods so you don’t make those same old mistakes that have seen some great profits go straight down the drain in the past.

The major problem we will run into at the moment is in the current market you can all but throw the text books out the window as a common sense approach to valuation of companies has been over taken by blind panic. But for the patient investor that does his homework these are times of great opportunity. But , yes the enviable “BUT” we all need to be conscious of the risks we are taking with our investing and I can’t express this strongly enough, if you don’t have the time or the skill sets to evaluate the risks of your investments then please, please seek professional advice. For those that are interested I can help put you in contact with some excellent brokers.

Risk evaluation should be the first port of call for all new investments and the things to look for are as follows.
- you have to look at solvency (i.e. debt)
- cash on hand
- how well established it is
- is it threatened by competition
- patents
- management
- other factors that may impact earnings
- sovereign risk
- war/politically unstable
- isolation
- so on and so on and so on...
Of course I am going to use ERH as the case study for this post and some maybe blown away by the results but the thing to remember here is to be honest with it an especially when you’re playing in the speculative end of the market, it’s always best to err on the side of caution.
So that being the case I am going to use a DCF model (discount cash flow) and use a discount rate of 16% as my risk factor.

The beauty of using a DCF is that you can calculate future growth in not only production rates but also say the increase in the oil price or the decrease (it really is a flexible tool when doing your valuations).

So only based on what we know for sure I will do this calculation and show you how to create a spread sheet. After you have done this once it should then become easier to set one up for your next company.

What is a DCF model (discount cash flow)
To show how discounted cash flow analysis is performed, consider the following simplified example.
John Doe buys a house for $100,000. Three years later, he expects to be able to sell this house for $150,000.
Simple subtraction suggests that the value of his profit on such a transaction would be $150,000 − $100,000 = $50,000, or 50%. If that $50,000 is amortized over the three years, his implied annual return (known as the internal rate of return) would be about 14.5%. Looking at those figures, he might be justified in thinking that the purchase looked like a good idea.
1.1453 x 100000 = 150000 approximately.
However, since three years have passed between the purchase and the sale, any cash flow from the sale must be discounted accordingly. At the time John Doe buys the house, the 3-year US Treasury Note rate is 5% per annum. Treasury Notes are generally considered to be inherently less risky than real estate, since the value of the Note is guaranteed by the US Government and there is a liquid market for the purchase and sale of T-Notes. If he hadn't put his money into buying the house, he could have invested it in the relatively safe T-Notes instead. This 5% per annum can therefore be regarded as the risk-free interest rate for the relevant period (3 years).
Using the DPV formula above, that means that the value of $150,000 received in three years actually has a present value of $129,576 (rounded off). Those future dollars aren't worth the same as the dollars we have now.
Subtracting the purchase price of the house ($100,000) from the present value results in the net present value of the whole transaction, which would be $29,576 or a little more than 29% of the purchase price.
Another way of looking at the deal as the excess return achieved (over the risk-free rate) is (14.5%-5.0%)/(100%+5%) or approximately 9.0% (still very respectable). (As a check, 1.050 x 1.090 = 1.145 approximately.)
But what about risk?
We assume that the $150,000 is John's best estimate of the sale price that he will be able to achieve in 3 years time (after deducting all expenses, of course). There is of course a lot of uncertainty about house prices, and the outturn may end up higher or lower than this estimate.
(The house John is buying is in a "good neighborhood", but market values have been rising quite a lot lately and the real estate market analysts in the media are talking about a slow-down and higher interest rates. There is a probability that John might not be able to get the full $150,000 he is expecting in three years due to a slowing of price appreciation, or that loss of liquidity in the real estate market might make it very hard for him to sell at all.)
Under normal circumstances, people entering into such transactions are risk-averse, that is to say that they are prepared to accept a lower expected return for the sake of avoiding risk. See Capital asset pricing model for a further discussion of this. For the sake of the example (and this is a gross simplification), let's assume that he values this particular risk at 5% per annum (we could perform a more precise probabilistic analysis of the risk, but that is beyond the scope of this article). Therefore, allowing for this risk, his expected return is now 9.0% per annum (the arithmetic is the same as above).
And the excess return over the risk-free rate is now (9.0%-5.0%)/(100% + 5%) which comes to approximately 3.8% per annum.
That return rate may seem low, but it is still positive after all of our discounting, suggesting that the investment decision is probably a good one: it produces enough profit to compensate for tying up capital and incurring risk with a little extra left over. When investors and managers perform DCF analysis, the important thing is that the net present value of the decision after discounting all future cash flows at least be positive (more than zero). If it is negative, that means that the investment decision would actually lose money even if it appears to generate a nominal profit. For instance, if the expected sale price of John Doe's house in the example above was not $150,000 in three years, but $130,000 in three years or $150,000 in five years, then on the above assumptions buying the house would actually cause John to lose money in present-value terms (about $3,000 in the first case, and about $8,000 in the second). Similarly, if the house was located in an undesirable neighborhood and the Federal Reserve Bank was about to raise interest rates by five percentage points, then the risk factor would be a lot higher than 5%: it might not be possible for him to make a profit in discounted terms even if he could sell the house for $200,000 in three years.
In this example, only one future cash flow was considered. For a decision which generates multiple cash flows in multiple time periods, all the cash flows must be discounted and then summed into a single net present value.
The above was taking from Discounted cash flow - Wikipedia, the free encyclopedia

Understanding the risk and company evaluation Part 2

Ok so now you should have a general idea of what a DCF does and how important it is to have

Setting up your DCF spread sheet
I will go through this in bullet point form and if I lose anyone let me know and I will cover that area again with you by email
For this DCF model the first port of call is establishing production rates and on an annual base. I am using the already announced 135bopd and only sticking with what we do know for sure.
Step1 for this sum the excel calculations would look this
· Under current year in the wells column 6B is a manual input
· Under current year in the Production/day column the sum would look like =B6*135 the 135 is the amount of barrels that are forecast as the production rate pre well
· Under current year in Annual production the sum would look like =B7*365
· ERH have a 40% participation rate so in B9 or the column ERH share the sum will look like this =B8*0.4
Ok we have now known the estimated production rate for the current year and ERH’s share of that production. The sums that we just inputted into the spread sheet do not change in year 1 and the following years, so the sums can simply be dragged over from column to column.
See picture below for how the spread sheet should look

By the time you’re finished you should have something that looks like the spread sheet below and your DCF should run for the life of the project that you are evaluating.

Step 2 is to establish a product price and in this example we are going to use an average oil price of $60 a barrel for oil.
To set this up on your spread sheet follow these steps.
· In column B21 under Average this is a manual input
· In column C21 under 10% royalty the sum will look like this =B21/10
· In column D21 under 34%tax the sum will look like this =B21*0.34
· In the column E21 under 1% landowners the sum will look like this =B21*0.01
· In column F21 under Transport costs this is a manual input based off best estimates.
· In column G21 under Opex (operating expense) this is a manual input based of best estimates.
· In column H21 under Profit your sum will look like this =B21-C21-D21-E21-F21-G21

The above oil profit estimate is based off Brazil’s tax rate and should be adjusted when you take up investments in other countries to correspond with that counties tax rates. The Opex and transport costs are based on world averages.

Step 3, in this step we actual build the DCF component into our spread sheet. We will also adjust our resource reserve size in each corresponding year as the resource declines. Also in this section we can add things in like, if you think the oil price will rise 10% for the next 5 years or if the company has debt you can build the annual repayments into your evaluation and so on. This is why the DCF system is so good, as it allows you to build in different requirements where most other valuation systems don’t give you this flexibility.

To set this up on your spread sheet follow these steps.
· In column 11B Well reserve start the 16,000,000 is a manual input. (this will allow you to decrease or increase the reserve size as estimates are released)
· In column 12B Well reserve end your sum will look like this =+B11-B9 (this calculation is simply misusing your annual production away from your reserve estimate). This sum remains the same for all columns in line 12. So C12, D12 and so on would look like this C12 sum

=+C11-C9, D12 sum =+D11-D9. You should keep repeating this process until the resource reserve runs out
· In column C11 your sum will look like this =+B12, this is simply making the current year’s reserve last year’s reserve end. This sum is repeated so D11 sum would look like =+C12 and E11 sum would look like =+D12 and so on.
You should keep repeating this process until the resource reserve runs out
Next we tackle annual cash flow estimates
· This sum by itself is an easy one, it is simply the annual production rate times the resource price profit or in cell B13 the sum would look like this =+B9*H21 and cell C13 sum would look like this =+C9*H21 and so on for all the columns in line 13

This next section is a bit technical and only those with a good understanding of both Excel and DCF models should try and implement these functions and sums into their DCF model. Also once you have mastered the basics you can come back and add these bits in later.

It is in the cash flow estimates that we can build in other scenarios like the estimation of the oil price increasing 10% for the next 5 years. For that you would have a sum that looked like this; In the current year your sum would remain the same =+B9*H21, this is due to the fact that you have already established an oil price estimate of $60 for that year. But in the following year cell C13 would look like this =+C9*H21+(C9*H21*0.1). Or for layman’s terms that sum represent annual production rate times the resource price profit plus the in brackets, annual production rate times the resource price profit times 10%. In cell D13 you would use almost the same sum =+D9*H21+(D9*H21*0.2) the difference being that you have increased your percentage rate to 20% which I will explain why in a moment. But in cell E13 and the rest corresponding cells in line 13 you would use this sum =+E9*H21+(D9*0.1). The reason for this is due to the production plan that the company has set out which is estimating it will take 3 years to roll out to reach full production. For this reason you need to take your estimated oil price growth rate of 10% in cell C13 from the actual profits of that year. In the following year you need to make it a 20% growth rate because you are using the same figures as you used for the previous year and if you said 10% again this would keep your figures flat so by using 20% you are still only getting a 10% raise from the previous year.
You can also build debt into this model much the same way as we just used a 10% increase in the average oil price per annum. I will explain this in detail in later blog updates.

Ok guys and girls we are almost there, we now need to build in our discount cash rate which as I said before it will be 16% on this model. Once you have setup your model up you can change the discount cash rate to whatever percent you feel comfortable with, with the risk you feel you are taken. The lower the risk the lower the percentage should be and the higher the risk the higher the percentage should be.
· In cell B14 your sum should look like this =+B13*0.84. So basically we are misusing away 16% of the annual income with this sum on the next cell C14 you would uses the same sum =+C13*0.84 and again in cell D14 =+D13*0.84.
· But in cell E14 you would use this sum =+D14*0.84 and in F14 you would use the =+E14*0.84 and so on. You will notice that in the case of B13, C13 and D13 we used that year’s annual profits for the discount rate but from cell E14 onwards we base the discount cash rate from the previous year’s discount cash rate. The reason for this is because if we used the sums that were used in B13, C13 and D13 the cash rate wouldn’t actually discount and would remain the same. The reason we don’t use the sums we used in E14 onwards in B13, C13 and D13 is because of the increase of the production rates of the oil.

Step 4 the final step (thank god); the accumulated and the fare value share price

Firstly we will go over the accumulation bit.
· The accumulation is simply adding up all the cash amounted in the Discount cash rate line. For this the sum in cell B15 would look like this =SUM(B14:L14).
Value per diluted share
· This is also another very easy one it is simply your accumulated total of the discount cash rate divided by the fully diluted market cap which in ERH’s case is about 365,000,000 shares. So your sum should look like this =+B15/365000000.
Using the 16% discount rate we end up with a fair valued share price of $0.08c based on 330 alone at a production rate of 2000 bopd at a $60 average oil price.
How is this so you ask, after all you have been calling a share price of a lot more than that over the past months? Well the answer is simply; in this model I have increased the discount cash rate from 10% to 16% due to the Silver Marlin mishap and the constant retraction in world and credit markets. Also those of you that read my first post on this blog would know that I gave the company a cash backing of $0.15 on a fully diluted market cap based on the proceeds from that dilution so that would take the valuation to $0.23.
Ok you should have now completed your DCF model and it should look something like the picture below

It’s also worth noting that by changing your discount cash rate from 10% to 16% the impact this can have on your over all fair value forecast of your share price. A 6% movement in our discounted cash rate in this case has had about a 32% impact on the share price. So be carefully when using this system and ensure you calculate the risks correctly. You will find that most financial institutions will use this system to obtain fair value and the major difference between different valuations will be how they calculate the risk or the discount cash rate.

Once you have mastered Discount Cash Flow you will find it to be a very useful and powerful tool in your investments and I strongly urge everyone to take the time and learn this stuff.
In future blog updates i will also cover how to build the capex function into your model but I think we have covered enough ground for now.

Finally I would like to thank Spozzie for the use of he’s DCF spreadsheet for this blog. You are an absolute champion mate, if only your kind could play cricket you would be a god amongst man LOL. And also Sutts for he’s input. Thanks heaps guys, it is very much appreciated

If anyone gets stuck on it don’t hesitate to contact me, my email is ciggys@y7mail.com.
Good luck with it guys

Brazil oil news

ExxonMobil's Brazil Exploration Effort Yields 2nd Oil FindCNNMoney.com - USARIO DE JANEIRO -(Dow Jones)- Oil giant ExxonMobil (XOM) continued its string of exploration success in Brazil , recording its second oil discovery in as ...See all stories on this topic

Oil Prices: Here Come Tighter Oil Supplies, Higher PricesWall Street Journal Blogs - New York,NY,USABy 2011, Brazilian oil officials say, production should top 2.4 million barrels a day, up from 1.85 million barrels a day last year. Oil gurus at Barclays ...See all stories on this topic

Emerging-Market Stocks Gain on China Stimulus; Brazil SurgesBloomberg - USACrude oil jumped 9 percent in New York to $45.38 a barrel. Dongfang Electric Corp., China’s second-biggest power- equipment maker, rose 17 percent in ...See all stories on this topic

Brazil Stocks Jump on Speculation of New China Plan; Ipsa GainsBloomberg - USAThe
world’s biggest maker of seamless pipes used to extract oil and gas was raised to “buy” from “hold” at Milan-based Cassa Lombarda.See all stories on this topic

Brazil markets lifted by China stimulus, recoveryReuters - USASAO PAULO, March 4 (Reuters) - Brazil's currency firmed and its metals- and oil-rich stock market jumped more than 5 percent on Wednesday after news that ...See all stories on this topic

Ecuador to Keep 70% of Perenco Output in Tax DisputeBloomberg - USA... to agree to changes in contracts or production targets, including Repsol YPF SA, Spain’s biggest oil company, and Brazil’s Petroleo Brasileiro SA. ...See all stories on this topic

MODEC FPSO achieves first oilOffshore Oil and Gas Magazine - Houston,TX,USATOKYO -- MODEC's FPSO Cidade de Niteroi MV18 has achieved first oil and the charter agreement has begun. The vessel is leased to Brazilian national oil ...See all stories on this topic

Whats driving the oil price????

Finally we are seeing OPEC cuts taking a tole on world oil stock piles and a increase in demand starting to re surge. With US oil stockpiles falling by 700,000 barrels in the last week of February and and world demand up 2.2% from this time last year. You will have to forgive me for thinking that this is the first real indication of a bottom that I have seen in both world oil and the stock market as a whole.
With this new news at hand it will make for an interesting OPEC meeting this month as they will be very aware of the fact that if they drop production again and oil shoots back to old highs to quickly that this will put a lot of strain on already stretched economies and a renewed push for greener energy's. So i am going to put my money on OPEC going with a wait and see approach for this month.

For more on this please see Oil price up over petrol demand

Brazil oil

Exxon Seen Using Cash Hoard for Field Stakes, Not TakeoversBloomberg - USA“The obvious opportunity is Brazil, where if oil stays at $40 much longer, the national oil company may have to get a partner to the table that has a lot of ...See all stories on this topic

Brazilian Stocks Advance on Metals Price Gain; Ipsa RetreatsBloomberg - USAThe country’s biggest air carrier fell to the lowest in eight months as crude oil gains signaled higher fuel costs for transport companies.See all stories on this topic

Pemex May Seek $10.5 Billion to Finance ProjectsBloomberg - USACompetitors such as Petroleo Brasileiro SA, Brazil’s state-controlled producer, are entering debt markets after a 73 percent plunge in oil prices since a ...See all stories on this topic

Renowned Brazilian Petro Veteran Provides Insight on Pre-Salt Oil ...PR Web (press release) - Ferndale,WA,USA(PRWEB) March 3, 2009 -- Since the discovery of potentially massive oil reserves in the "pre-salt" region off the coast of Brazil, the Brazilian government ...See all stories on this topic

New York TimesCountries Stepping in to Finance Export TradeNew York Times - United StatesWhen he fielded a call from his distributor in Brazil in December, Mr. Auton received the good news first. “Hey, we’ve got a buyer here,” Mr. Auton recalled ...See all stories on this topic

Brazil oil new

LATIN AMERICAN MARKETS: Mexico Hit, Brazil's Yearly Gains Gone ...CNNMoney.com - USAIn Brazil , shares of oil giant Petroleo Brasileiro (PBR) stumbled 4% and hit intraday lows not seen in a month. Shares of Companhia Vale do Rio Doce (RIO), ...See all stories on this topic

Brazil Stocks Fall, Erase Year’s Gain as Global Crisis DeepensBloomberg - USAVale do Rio Doce, Brazil’s biggest stocks, sank more than 5 percent as crude oil dropped more than $4 a barrel and metals prices fell. ...See all stories on this topic

Going green: Entire Swedish city switches to biofuels to become ...Chicago Tribune - United States... or an 85 percent ethanol blend from Brazil. Just as important, the switch from oil and gas is helping slash fuel bills and preserve jobs in a worldwide ...See all stories on this topic

Emerging-Market Stocks Fall to 14-Week Low; Currencies WeakenBloomberg - USABrazil’s Petroleo Brasileiro SA slid 5.2 percent on a $4-a-barrel drop in oil. Currencies weakened, with the Mexican peso falling to a record against the ...See all stories on this topic

SYS-CON MediaVetcoGray to Supply Equipment for Massive OGX Drilling Campaign ...SYS-CON Media - Montvale,NJ,USAThe drilling campaign has the potential to significantly increase Brazil’s oil discoveries. Created in 2007, in response to growing interest in major oil ...See all stories on this topic

China Goes on a Smart Shopping SpreeTIME - USAIn mid-February, Beijing negotiated a $10-billion loan to Brazil's state-owned oil company Perobras, as well as a $25-billion loan to Russia's state-run oil ...See all stories on this topic

Voice of AmericaMexico Hopes to Revive Oil Production in New FieldsVoice of America - USABeltran says state-owned companies like Brazil's Petrobras may be among the first invited
in to help Mexico develop its assets. "Mexico is now open to joint ...See all stories on this topic

Chart Presentation First to Worst, Worst to FirstInside Futures - Chicago,IL,USAThe trend for the Nasdaq tends to be similar to that of Japan's Nikkei, Hong Kong's Hang Seng Index, Brazil's currency, energy prices, and metals prices. ...See all stories on this topic

Sergipe-Alagoas Basin

Location

Brazil’s northeastern
continental margin

- It is located in Sergipe and Alagoas States,

- It shows an elongated NE-SW shape with 350 km of extension and 35 km mean width onshore


- Total area: 44,370 km², where 12,620 km² in the onshore portion





















Infrastructure
















Exploratory History

1935 - Geophysical surveys and drilling of the 2-AL-1 well by the“Conselho Nacional do Petróleo” .Boreholes in northern Alagoas State.

1957 - First commercial oil discovery in the TM-1-AL well.Exploratory History1963 - Discovery of the Carmópolis Field in the Sergipe Sub-Basin,the greatest field, with original oil in place of 268 million m³(ANP, 2008).

60´s - First commercial oil discovery in the Brazilian continental margin,(Guaricema Field), by the wildcat well 1-SES-1A.

Wells: 996 exploratory and 3,582 development (total of 4,578);

Seismic: 39,927 km 2D onshore, 82,642 km 2D
offshore, 4,523 km² 3D onshore and 27,930 km²
3D offshore.

Fields: 44 under development/production/evaluation and
13 turned ones.

Geology









Tectonic reconstruction map of the pre-drift
configuration of the sedimentary basins
(Bizzi et al. 2003)
















Pre-drift reconstruction
(Matos, 1999, 2000)


Tectonic Evolution



Diachronism between:
- Tucano-Jatobá Basin
- Sergipe-Alagoas Basin
- Potiguar Onshore Basin








Origin: Jurassic-Cretaceous rifting between South America and
African plates;
Tectonic Styles:
. Pre-Rift and Rift sequences: Diastrophic tectonics;
. Post-Rift sequence: halokinesis;
Structural Context: asymetric elongated rift with 350 km of
extension in the NE-SW direction. It is divided
into two sub-basins (Sergipe and Alagoas);
Main structures: vertical faults in the N45°E direction (Hingeline
Alagoas) with maximum displacement of 5 km;
elongated horsts limited by normal faults (Penedo
High); anticlines and listric faults associated to
halokinesis.

Petroleum Systems
Main Petroleum Systems:
• (Muribeca) Maceió/Aptian: Muribeca Fm./Carmópolis Mb.- reservoirs
(Muribeca) Maceió Fm. shales - oil generation
Main Fields: Carmópolis, Siririzinho, Camorim and Riachuelo;

• Penedo-Barra de Itiúba/Neocomian-Barremian: oil is generated in
lacustrine shales of the Neocomian section, in the Barra de Itiúba Fm.
Main fields: Pilar and São Miguel dos Campos;

• Calumbi/Neocretaceous-Tertiary: reservoirs in the Calumbi Fm.
turbidites. Syn-rift generation, during Late Aptian in the Muribeca (Maceió)
Fm. Main fields: Guaricema and Dourado.

Source Rocks:
. Barra de Itiúba Fm. (Neocomian/Barremian): lacustrine shales
from pre-rift and rift phases;

. Coqueiro Seco Fm. (Barremian/Eoaptian): lacustrine shales
from rift phase;

. Maceió Fm. (Neoaptian): main source rocks – black shales, marls
and calcilutites. TOC =3.5%<12%;> 9 mg HC/g rock; IH=300
mg HC/g TOC; Kerogen Type II; mean thickness=200m, at
maximum of 700m ;

Riachuelo and Cotinguiba Fm. (Albian-Turonian shales and
calcilutites) could generate at great depth.

Generation and Migration:
• The main source rocks are mature in deep water at lower portions of
Alagoas hingeline.
• Shallow accumulations (onshore and shallow water): generation
from Maceió Formation. Lateral and long distance migration along
faults to the accumulations in paleogeomorphic traps. (Ex.
Carmópolis Field).
• Normal faults, listric faults and unconformity act as pathways for
hydrocarbon migration.
Reservoirs: distributed from basement to Tertiary formations.
Alagoas Sub-Basin:
Onshore: sandstones from Serraria, Barra de Itiúba, Penedo,
Coqueiro Seco e Maceió formations;
Deep water: Cretaceous and Tertiary turbidites from Calumbi
Formation; clastic rocks from Maceió Formation.
Sergipe Sub-Basin: onshore and offshore: clastic rocks from Carmópolis
Mb. (Fm. Muribeca) and Cretaceous turbidites from Calumbi Fm.,
sandstones from Serraria Fm., fractured basement, rift phase
sandstones, Riachuelo/Cotinguiba formations carbonates;
- Deep water: Cretaceous and Tertiary turbidites from Calumbi
Fm. - transitional sequence.

Traps:
- Pre-rift and rift sequences: structural traps (domes), such as Pilar and
São Miguel dos Campos fields or faulted blocks, such as Atalaia Sul and
Coqueiro Seco Fields.
- Transitional sequence: paleogeomorphic traps, as: Muribeca Fm./
Carmópolis Mb. - faulted blocks or traps associated with halokinesis.
- Upper sequence: mixed and stratigraphic traps, associated with
halokinesis or channel infill.

Seal Rocks:
- Carmópolis Mb. reservoirs and fractured basement: shales and
evaporites from Ibura Formation;
- Sandstones from Serraria Formation: basal shales from Barra de
Itiúba Fm., sandstones from Penedo Fm., basal shales from
Coqueiro Seco Formation.
- Barra de Itiúba, Coqueiro Seco and Maceió formations:
intraformational shales.
- Turbidites from Calumbi Fm.: deep water shales.
- Fractured carbonate reservoirs from Muribeca, Riachuelo and
Cotinguiba Fm.: interbedded shales.

Reserve Data

RESERVES* Oil Reserves(Million Barrels) Gas Reserves(Million Cubic Meters)
Proven Reserves 240.47 3,770.09
Total Reserves 358.53 5,661.77


*Data until December, 2007



















Current Situation
Sergipe - Alagoas
• 52 producing fields (oil / gas)
• 13 returned fields

SE-AL onshore production 2008:
• 8,661,055 bbl
• 1,337 km 2D seismic
• 408 km² 3D seismic
• 219 drilled wells
• 04 fields under development
• 01 exploratory block
• 11 fields
Alagoas Basin – Onshore

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