Petrobras (NYSE:PBR) has reported several new oil and gas discoveries in offshore Brazil recently, once again confirming the presence of an immense resource base ready to be developed to satisfy future energy global demand.

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Background
Petrobras is the Brazilian state-owned oil company, with the Brazilian government owning 50.2% of the common shares as of July 31, 2012. Other entities associated with the government own additional shares and bring the total share ownership close to 60%.

Sub Salt
Petrobras and other operators have confirmed the presence of large amounts of crude oil and natural gas in formations below a thick layer of salt in offshore Brazil. These pre salt or sub salt resources are immense and represent a large future supply of energy. The largest discovery is the Lula or Tupi field is in the Santos Basin, which was found in 2006. The field holds estimated recoverable reserves of five to eight billion barrels of oil equivalent.

SEE: A Guide To Investing In Oil Markets

Recent Discoveries
Petrobras recently reported a successful appraisal well at Barra in the Sergipe-Alagoas Basin. The Barra 1 well confirmed the presence of oil and natural gas in separate sections of the Calumbi formation and Petrobras plans to continue appraisal operations here.

Petrobras also reported a successful well in the Transfer of Rights Area in the Santos Basin. This was the company's fourth well here and it confirmed and extended the presence of high quality crude oil in this area.

SEE: Oil And Gas Industry Primer

Other Properties
Petrobras is active with oil and gas exploration and development in other areas and operates and owns 66.67% of the Chinook field in the Gulf of Mexico. The company also owns 100% of the Cascade field which started up production in February 2012. Total (NYSE:TOT) is also involved with the Chinook field on a non-operated basis and owns a 33.33% interest.

Petrobras also owns a 25% share of the St. Malo field, operated by Chevron (NYSE:CVX). Oil was first discovered here in 2003 and the field is considered one of the most promising deepwater discoveries in the Gulf of Mexico.

Oil Service Beneficiaries
One domestic oil service company that will benefit from the expected development of these offshore oil and gas properties is Dril-Quip (NYSE:DRQ). The company recently signed a four-year contract worth $650 million to supply subsea wellhead systems and other equipment to Petrobras.

Petrobras is also working on other energy-related industrial complexes, including a gas-to-liquids plant in southeastern Brazil. The plant will make fertilizer and other chemicals and is expected to be completed by the end of 2013. Foster Wheeler AG (Nasdaq:FWLT) was awarded an engineering contract by Petrobras to help design this facility. The company did not disclose the value of this contract.

The Bottom Line
The conventional wisdom holds that all the world's giant oil fields have been found, leaving oil and gas companies to fight desperately for the remaining scraps. The Brazilian offshore may one day prove this wisdom misplaced.

At the time of writing, Eric Fox did not own shares in any of the companies mentioned in this article.

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