Brazil cautious on oil find, but investors bet big petrodollars are coming

By JERUSALEM POST STAFF
Brazilian officials cautioned that reports of a vast, deep-water oil field are still unconfirmed, but investors betting on big petrodollar profits ignored the warnings and sent stocks of two offshore exploration companies soaring. BG Group shares closed up 5.4 percent Tuesday in London and Repsol YPF stock rose 9.3 percent in Madrid even though National Petroleum Agency President Haroldo Lima cautioned that his information on the field off the coast of Rio de Janeiro is unofficial and needs to be confirmed. The two companies are partners in the Carioca exploration area with Brazil's state-run Petrobras, whose shares rose Tuesday for the second day in a row despite statements by its own executives that more studies are needed to determine the find's potential. Jorge Zelada, director of international operations for Petroleo Brasileiro SA, told reporters that a first well drilled found evidence of oil and while a second well is being drilled, the company does not "have an evaluation yet." But investors were still hanging onto Lima's unexpected declaration from a day earlier that the field could contain 33 billion barrels of oil, which would nearly triple Brazil's reserves. Carioca, he said, would also be far larger than a huge find announced in November.