http://www.bloomberg.com/apps/news?pid=20601109&sid=aoC91kszkcf4&refer=home
Net of the net, it's going to be pretty darn EXPENSIVE + DIFFICULT for BRAZIL to drill for this stuff. Given where + the complexities involved, it appears that even the world's largest + best run deepwater oil drillers (Transocean...RIG, National Oilwell Varco...NOV, Noble Corp...NE, etc.) do NOT currently have the technological resources to accomplish such a feat.
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Detailed Takeaways (quoted directly) from the article:
*Brazil's plan to become one of the world's biggest oil exporters hinges on exploiting crude 6 miles below the ocean surface in deposits so hot they can melt the metal used to carry uranium to nuclear plants.
*Until the tools needed to exploit the reservoirs are invented, the crude will remain locked under the sea, said Matt Cline, a U.S. Energy Department economist. "This is a very, very technically challenging environment where no one's ever done this,'' Cline, who tracks the Latin American oil industry, said in a telephone interview from Washington. "These discoveries are in very deep water, and once you get to the seabed they are very deep under the floor, with a layer of salt that is definitely a difficult barrier.''
*Pumping oil from the Brazilian finds, parts of which are 32,000 feet (10,000 meters) below the ocean's surface, will require boring almost twice as far down as the world's deepest producing offshore well...The obstacles will discourage development unless crude prices stay high
*Tapping what may be the biggest oil finds in the Western Hemisphere in three decades will require equipment that can withstand 18,000 pounds per square inch of pressure, enough to crush a pickup truck, pipes that can carry oil at temperatures above 500 degrees Fahrenheit (260 Celsius) and drill bits that can penetrate layers of salt more than one mile thick.*The ocean-depth record for production was set last year by Anadarko Petroleum (APC)...The company is extracting natural gas from beneath 8,960 feet of water in the Gulf of Mexico, where pressure measures 3,069 pounds per square inch, squeezing joints and tearing at seals.
*Tupi, 155 miles (250 kilometers) off Brazil's coast, may begin production by 2012, according to consulting firm Strategic Forecasting in Austin, Texas. The field may have 8 billion barrels of recoverable oil.
*No start date has been set for Carioca, which Petroleo Brasileiro (PBR) said will take at least three months to evaluate. A Brazilian regulator said this month the reservoir may have 33 billion barrels.
* "A big find might not be a good find if it costs so much to develop that it's not commercially viable...We don't have any idea at all yet of all the costs that are going to be involved. Those costs are going to set the floor for oil prices...These challenges in the Brazilian offshore area are too great for any one company or even country to be able to digest themselves'' - S&P analyst Tina Vitale (also a former Exxon Mobile engineer)Data Courtesy: Bloomberg.com, snagged on 4/28/08.
Full Disclosure: I own shares of RIG.
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