UPDATE 2-Petrobras IBV Brazil offshore oil find 'beautiful' -CEO

Fri Sep 27, 2013 6:24pm EDT

* Reuters reported on Thursday that area holds more than 1 bln barrels

* Petrobras declines to give estimate for discovery size

* CEO says Sergipe offshore to produce oil in 2018

By Jeb Blount

RIO DE JANEIRO, Sept 27 (Reuters) - Brazil's state-led oil company, Petroleo Brasileiro SA, and its Indian partners have made a "beautiful" oil discovery off Brazil's northeast coast and it will produce a minimum 100,000 barrels of petroleum a day starting in 2018, the company's chief executive officer said on Friday.

Maria das Gra├žas Foster, the chief executive, declined to say how big the discovery is but said it was an important new oil "province" for Brazil and that its large potential reserves would create a rush of jobs and activity to the area that will need to be managed carefully.

On Thursday, Reuters exclusively reported that the discovery, centered on the SEAL-11 offshore exploration block, likely holds more than 1 billion barrels of oil and that the region will soon become Brazil's biggest new oil frontier.

The SEAL-11 block is 60 percent-owned by Petrobras and 40 percent-owned by IBV Brasil, a 50-50 joint venture between India's Bharat Petroleum Corp (BPCL) and Videocon Industries Ltd.

"In 2008 we decided to do a very extensive investigation of the area, and the results we have got have been very good," Foster told reporters at company headquarters in Rio de Janeiro. "This is a beautiful discovery, beautiful discoveries."

In addition to light, high-quality crude oil, the region has important quantities of gas, she added.

Two prospects in the area, known as Farfan and Muriu, are expected to be developed as a single or integrated unit, with at least one floating production, storage and offloading ship (FPSO) producing oil and gas from the area in 2018, Foster said.

Foster said that was the minimum outlook for the area based on spending in the company's $237 billion 2013-2017 investment plan drawn up before the latest drilling and tests in the area.

If confirmed, the new find could make the region the country's biggest new oil frontier since the government unveiled the massive subsalt discoveries off the coast of Rio de Janeiro and Sao Paulo states in 2007.

REFINERY PLANS

Foster also said that Petrobras is totally reforming its plans to build two low-sulfur diesel refineries in Brazil's northeast. The so-called premium refineries planned for the states of Maranhao and Ceara were showing signs they would not be profitable.

The Maranhao refinery is expected to cost about $20 billion to build.

Petrobras, however, has reworked the projects with the help of U.S. based consultants, Foster said, and those projects are now looking stronger. The company hopes to start putting the refineries out to tender as early as March, she said.

The company is also in talks with a Chinese company to take a stake in the Maranhao project, Foster said. The project could lead to the Chinese partner taking a majority stake, she added.

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