Petrobras becoming the talk in the oil world

Implications: The state run oil company Petroleo Brasileiro SA. (Petrobras) appears to be close to a second offshore oil strike containing as much as 33 billion barrels in oil equivalent. The discovery is in the "presalt area" at ocean depth of more than 6,500 feet and beneath additional 9,800 feet of sand and rock. There is also a 6,500 feet salt layer, making exploration and production expensive.  Brazil is fast becoming the talk in the oil world.

Analysis: Since opening exploration to private oil companies in the late 1990s Petrobras found the Tupi oil field in 2006 with estimated 8 billion barrels of reserves and has cut out 41 exploration and production blocks close to Tupi.  The newly discovered block with up to 33 billion barrels of reserves is operated by Petrobras with 45%, BG Group (British Gas) holds 30% and Repsol has 25%.  Petrobras is becoming a major integrated oil & gas companies in the Western hemisphere.