Brazil has mucho oil now!

OGX May Have Found 1.5 Billion Barrels Oil in Brazil (Update2)

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By Lucia Kassai

Oct. 14 (Bloomberg) -- OGX Petroleo e Gas Participacoes SA, the oil company controlled by billionaire Eike Batista, said it may have discovered as much as 1.5 billion barrels of oil in an offshore block after drilling off Brazil’s southeastern coast.

The BM-C-43 block, located in the shallow waters of the Campos Basin, may hold between 500 million and 1.5 billion barrels, based on well information and seismic data, Rio de Janeiro-based OGX said today in a regulatory filling. The company owns all of the block, according to its Web site.

OGX raised 5.87 billion reais ($3.43 billion) in its June 2008 initial public offering as investors bet Batista could match Brazil’s state-controlled Petroleo Brasileiro SA’s success at finding oil. Batista, who owns about 62 percent of OGX, is ploughing about $4 billion into crude exploration and production, with first oil output expected by late 2011.

The company earlier this month also said it found signs of crude in the BM-S-29 block, in the Santos Basin off the coast of Sao Paulo state. The company estimates it holds a total 4.8 billion barrels of oil and gas and plans to spend $2 billion during the next three years drilling about 50 wells, Chief Financial Officer Marcelo Faber Torres said Oct. 2.

OGX holds 22 exploratory blocks in Brazil’s Campos, Santos, Espirito Santo and Para-Maranhao basins with an offshore exploration area of 7,000 square kilometers.

Brazilian Reserves

Brazil’s proven crude reserves totaled 12.6 billion barrels last year, according to London-based BP Plc. The country’s so- called pre-salt oil region, including the biggest oil discovery in the Americas since 1976, may hold as many as 100 billion barrels, Brazilian Cabinet Chief Dilma Rousseff said Sept. 29.

OGX fell 58 reais, or 3.6 percent, to 1,565 reais at 11:36 a.m. in Sao Paulo. The shares have almost tripled this year.

The oil producer also said it will start drilling at the BM-C-41 block, also in the Campos Basin, later this month.

To contact the reporters responsible for this story: Lucia Kassai at lkassai@bloomberg.net

Last Updated: October 14, 2009 10:57 EDT