Brazilian state-run energy giant Petroleo Brasileiro S.A. or Petrobras (PBR) announced that on Nov 6, it completed the drilling of well 3-BRSA-1255 (3-RJS-731), situated at a water depth of roughly 1,963 meters in the northwest part of the Libra block, Santos Basin. 3-RJS-731 is also the first appraisal well in the block where a consortium, operated by Petrobras with a 40% stake, is drilling.
Apart from Petrobras, the other players of the consortium are Europe’s largest oil company Royal Dutch Shell plc (RDS.A), integrated energy firm TOTAL SA (TOT), upstream energy firm CNOOC Ltd. (CEO) and China National Petroleum Company (“CNPC”). Shell and Total hold 20% interest each whereas CNOOC and CNPC have 10% stake, respectively.
Petrobras added that while drilling the well, which is located in the pre-salt area of the Santos Basin, it has reached a total depth of roughly 5,734 meters. The company revealed the finding of good quality oil of 27 degrees API. Petrobras also found 290 meters of oil column in the well.
Additionally, Petrobras declared that the consortium is now drilling 3-RJS- 735 – the second well in the Libra consortium area.
Headquartered in Rio de Janeiro, Petrobras is an integrated energy firm in Brazil. The company’s deep sea pre-salt reserves include fields that are located deeper than 2,000 meters, and are further 5,000 meters below sand, rocks and salt, making explorations technologically complex, challenging and expensive. As such, the success of these projects remains uncertain and bears great financial risk.
As a result, the company currently carries a Zacks Rank #5 (Strong Sell) implying that it will significantly underperform the broader U.S. equity market in the next one to three months.
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