The Rising Influence of Rising Affluence

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XOM/HES Start Exploratory Well in Brazil’s BM-S-22

This will the third well drilled on this block; the first well found a non-commercial amount of oil and the second well, called Guarani, was dry (#msg-39351839). On yesterday’s BofA webcast, John Hess said the Santos basin of Brazil remains poorly understood, but the potential upside from the BM-S-22 block is too large to ignore.]

http://www.bloomberg.com/news/2010-11-12/exxon-brazil-unit-starts-third-pre-salt-well-at-santos-basin.html

›By Peter Millard - Nov 12, 2010

Exxon Mobil Corp. and Hess Corp. began drilling a third well in deep waters off the coast of Brazil after hitting a dry hole in the same block last year.

Exxon is using Oslo-based Seadrill Ltd’s West Polaris rig to drill the Sabia well in 2,272 meters (7,454 feet) of water in the Santos Basin, Exxon spokesman Patrick McGinn said today in an e-mail. Exxon operates the block with a 40 percent stake.

The Irving, Texas-based company last year failed to find oil or natural gas at the Guarani well, after earlier finding signs of oil at a well in the same block. The two largest oil finds in the Americas in 34 years, Tupi and Libra, are located in the same so-called pre-salt area of the Santos Basin.

“It’s a very important next step to how they view, and go about developing the Brazilian deepwater,” Ted Harper, who helps manage about $6.8 billion at Frost Investment Advisors in Houston, including Exxon, said today in a telephone interview.

Exxon and Hess each hold 40 percent of block BM-S-22, while Petroleo Brasileiro SA, Brazil’s state-controlled oil company, owns the remainder.‹