(Reuters) – Brazil’s state-led oil company Petroleo Brasileiro SA said on Wednesday that it found medium grade crude oil in a well drilled in the Upper Magdalena Valley Basin in Colombia’s Tolima province, a potential expansion of an existing production area.
The oil, at 23.9 degrees on the American Petroleum Institute (API) scale, was found in the Guando SW1 well drilled to a final depth of 1,576 meters (5,171 feet), the Rio de Janeiro-based oil company said in a statement.
Medium grade crude is heavier and worth less than high-grade “light” oil but worth more than thicker heavy grades of crude. Medium crude is rated 22.3 to 31.1 degrees on the API scale. The higher the number the “lighter” the oil.
The Petrobras discovery is part of work to restart exploration in the Boquerón Block, which is in production. Petrobras has been working in the area for 12 years. Boquerón is home to the Guando Field, one of the biggest discoveries in Colombia in the last 15 years, Petrobras said.
Guando, about 110 kilometers southeast of Bogotá, has an estimated 126 million barrels of recoverable oil, or enough to supply all of Colombia’s oil needs for about a year and a half, according to Reuters and BP Plc.
Petrobras has 15 exploration projects in Colombia, six offshore and the rest, including the latest discovery, on land, the company said.
On Oct. 27, Petrobras began a long-duration test on the Guando SW1 well which is showing initial production levels of about 500 barrels of oil a day.
Further tests are needed to determine the potential of the discovery, Petrobras said.
Petrobras preferred shares, the company’s most-traded class of stock, rose 3.77 percent to 20.93 reais on Sao Paulo’s BM&FBovespa exchange, the company’s biggest one-day jump in three months and highest close in six weeks.
Petrobras announced the discovery after the market closed.