Brazilian Oil Finds May Cost $240 Billion to Develop

(Bloomberg) — Brazil’s oil discoveries, including the Western Hemisphere’s largest in three decades, may cost $100 billion more to develop than the industry’s most costly field.

The Tupi deposit and nearby offshore prospects probably will cost $240 billion to exploit, said Peter Wells, director of U.K. research firm Neftex Petroleum Consultants Ltd. and a former Royal Dutch Shell Plc exploration manager. The total exceeds the $136 billion estimate for Kazakhstan’s Kashagan field, led by Eni SpA, and would be enough to fund the U.S. space program for 14 years.


Brazil’s state-controlled Petroleo Brasileiro SA will need to enlist international producers such as Exxon Mobil Corp. to raise financing for the platforms and pipelines required to reach crude trapped beneath six miles (10 kilometers) of water and rock, Wells said in a telephone interview. The prospects may hold $6 trillion of petroleum and make Brazil one of the world’s 10 largest oil producers.

“This oil is going to be difficult to get out of the ground and it will cost a lot,” said Wells, who also was a chief negotiator for BP Plc in Azerbaijan. Petroleo Brasileiro “will need the capital expertise only found with the world’s largest, most experienced oil companies.”

Bloomberg