The People of America's Oil and Natural Gas Indusry

Brazil's Libra: Largest Oil Field in the Americas in Decades

Jane Van Ryan

Jane Van Ryan
Posted November 1, 2010

Brazil says its deepwater Libra oil field could hold as much as 15 billion barrels of oil, making it the biggest crude oil discovery in the Americas since Mexico discovered the Cantarell field in 1976.

The Libra prospect lies in the Santos Basin about 500 miles off the coast and beneath a layer of salt about 9,800 feet below the ocean surface. ANP, Brazil's national petroleum regulatory agency says the government will retain control of Libra, and at least two Brazil-owned companies will own stakes in the field. Bloomberg/BusinessWeek reports that Petrobras, one of the companies, raised $70 billion last month in the world's largest share sale toward the $224 billion, five-year investment plan, which is said to be the oil industry's largest.

santos basin.jpg

Back in the U.S Gulf of Mexico, however, prospects aren't quite so rosy. At least two major oil companies have reported that the now-lifted deepwater drilling moratorium is having an impact on their bottom lines.

In its third-quarter earnings report, Shell's Chief Financial Officer Simon Henry told reporters last week that his company "will miss out on a planned production increase of around 40,000 barrels per day in 2011." (AP) Chevron, which had six shallow-water and three deepwater rigs under contract earlier this year, isn't predicting when drilling activity will pick up.

"There is some progress, but I think it's going to be slow," Chevron's Chief Financial Officer Pat Yarrington told analysts. "We are hopeful in the next several weeks, couple of months, that we will have a better indication of how long exactly it will take to get through the permitting process." (Reuters)

Still, Chevron is planning to pursue the $7.5 billion development of two deepwater fields at the lower edge of the U.S. Gulf. The massive Jack/St. Malo development project involves the construction of three subsea centers tied back to a hub production facility with a capacity of 170,000 barrels of oil and 42.5 million cubic feet of natural gas per day. The fields are about 25 miles apart and about 280 southwest of New Orleans. Production is expected to begin in 2014.


Source: Chevron
In the short-term, the Energy Information Administration (EIA) projects the moratorium will reduce domestic oil production by 31,000 barrels a day at the end of this year and 82,000 barrels a day in 2011. The oil and natural gas industry continues to work constructively with the U.S. Interior Department to address remaining issues from the Deepwater Horizon accident and to produce much-needed energy for American consumers.