The National Petroluem Agency (ANP) of Brazil found another “megareserve” in the Atlantic, this one off the coast of Sao Paulo.  It is believed to big as large as the so-called Lula oil field, which holds between five and 8 billion barrels of oil. Although the discovery is made in the pre-salt fields that stretch from as far north as Espirito Santo, down to Rio, Sao Paulo, Parana and, finally, Santa Catarina states, it is in an area that is not regulated by the current pre-salt partnership model. That means this oil is 100% government owned.

Other discoveries can be auctioned off in annual auctions. In those deals, Petrobras gets 30% of the project and foreign firms can take the lion’s share. The ANP reportedly wanted to include the well in the new auction scheduled for Oct. 7, but the federal government said no, Estado de Sao Paulo daily reported on Friday.  That means Petrobras gets 30%, the federal government gets 70%.

No one knows yet what the new area holds. Only geographical surveys have been concluded. No one is drilling yet.  Estado cited unnamed sources saying the field was “very large”.  They compared it to the Lula field, named after ex-president of Brazil, Luiz Inacio Lula da Silva. The field accounts for 44% of Brazil’s pre-salt oil production.

Rumor has it that current president Dilma Rouseff was the main voice behind keeping the field out of the upcoming election, preferring to save it for the future. That means there is a chance that Petrobras could open that field up to partners.

Petrobras has bursted onto the world stage again this year when a massive corruption scandal involving political figures and the oil firm’s construction partners were implicated in various schemes that pulled the rug out from under the company’s share price…and its reputation. Things have since cooled. But investors have not yet given Petrobras a full pass. The stock price has been struggled to get over $10 per share. The international scenario, led by the Federal Reserve, is putting some emerging market stocks on ice anyway. News of a discovery of this size, however, is a net positive for Petrobras.

Source: Forbes