BP STARTS FIRST DEEP-WATER WELL IN BRAZIL

BP Plc. (BP), the United Kingdom's biggest oil producer, started drilling its first deep-water well in Brazil near a discovery it bought from Devon Energy Corporation (DVN).

BP, based in London, is using the Deep Ocean Clarion drill ship to explore the Itaipu Prospect, Brazil's Oil Regulator has announced. The well is in 1,426 metres (4,678 feet) of water in the offshore Campos Basin that supplies more than 80% of Brazil's oil production.

BP plans to expand Brazil's output of crude oil to more than 100,000 barrels a day after paying US$3.2 billion to buy nine exploration licences from Devon in May, 2011. Itaipu sits more than two miles below the sea floor, trapped under a layer of salt in an area where Petroleo Brasileiro SA (PETR4), Anadarko Petroleum Corp.

(APC) and Respol YPF SA (REP) have made discoveries. Itaipu is six miles from Petrobras' Jubarte field and 16 miles from Anadarko's Wahoo discovery, both in the so-called pre-salt area of Campos that holds three of Brazil's ten most productive wells. The Itaipu well will be BP's first deep-water well drilling outside of Angola since 2010, when its Macondo Well caused the worst offshore spill of oil in the United States of America.