February 9, 2012 / 12:25 AM / 7 years ago

UPDATE 2-Petrobras finds crude in off-shore subsalt area

(Adds details and context)

* Petrobras makes first find in Franco subsalt area

* Area being explored under 2010 stock-for-oil swap

RIO DE JANEIRO, Feb 8 - Petrobras said on Wednesday it made its first petroleum discovery in an offshore subsalt area that the Brazilian state-controlled oil giant is exploring under a $70 billion oil-for-stock swap deal inked in 2010.

The discovery confirms that a reservoir first discovered by the ANP, Brazil’s oil regulator, in 2010 and known as “Franco” extends to the northeast into areas Petrobras obtained in the swap, the Rio de Janeiro-based oil company said in a statement sent to Brazil’s securities regulator.

The discovery moves forward efforts by the Brazilian government to control giant oil reserves and to become one of the world’s major oil producers along with Saudi Arabia and Russia.

Petrobras hopes to get about 845,000 barrels of oil a day, or 13 percent of its total projected 2020 output of 6.4 million barrels a day for the offshore subsalt areas it got in the 2010 deal.

The Franco reserve may hold about 6 billion barrels of oil, Petrobras said in 2010, or enough to supply the United States oil needs for 10 months. Petrobras bought rights to 3 billion barrels of oil from the Franco area in the 2010 swap.

This is one of the biggest oil discoveries in Brazil since the Lula find in 2007.

The Lula field in the Santos basin subsalt area contains about 8 billion barrels of oil and at the time of its discovery it was the largest find in the Americas in three decades.

Petrobras said a statement that the samples from the first well in that area showed “good quality oil” at 28 degrees on the American Petroleum Institute scale, a lighter and more valuable grade of crude than most of the oil produced in Brazil.

Petrobras, which accounts for 90 percent of Brazil’s oil and gas output, has been criticized for its slow increase in output since the discovery of several massive subsalt oil fields off the coast that were announced in 2007.

Petrobras’ 2.72 million barrels a day of output in December was lower than a year earlier. (Reporting by Sabrina Lorenzi; Writing by Alonso Soto; Editing by Jeb Blount, David Gregorio and Bob Burgdorfer)

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