“Just when the world thought it was running out of oil,” along comes a potentially massive oil discovery 400km off the coast of Brazil, said breakingviews’ Fiona Maharg-Bravo. Harold Lima, the head of Brazil’s National Petroleum Agency, said the Carioca field could contain as much as 33bn barrels of oil, which would make it the world’s third-largest reservoir.
The comments sparked a sharp rise in the shares of Britain’s BG Group (BG), which along with local oil giant Petrobras and Spain’s Repsol is exploring the field. BG is 30% of the consortium.
But the figure is at best “a guesstimate”, as Maharg-Bravo said. It’s not clear where Lima got his information from; Petrobras said it was too early to gauge the field’s potential as drilling has barely got going. Analyst Matthew Shaw of Wood Mackenzie reckons the discovery may be “fairly modest”.
Still, “Brazil has recent form”, as Lex notes in the FT. Last year it was confirmed that the Tupi field, in the same area, contains 5bn-8bn barrels of recoverable reserves. Carioca could potentially add a significant amount of oil to a market where record prices – $114 a barrel in New York this week – have been underpinned by a supply squeeze, as Terry Macalister noted in The Guardian. But it seems unlikely to bring fast relief: it would take almost a decade before the field would be ready for production.