By Ben Tavener, Senior Contributing Reporter

RIO DE JANEIRO, BRAZIL – Brazilian petroleum giant Petrobras has confirmed that recently-discovered reserves of oil and gas at the Pão de Açúcar well, 121 miles (195km) from the Rio state coastline, amount to over 1.2 billion barrels, following exploration work there. The site, known as Concessão BM-C-33, is located to the south of the Bacia de Campos oil field region.

All eyes remain fixed on Brazil's oil industry over four years since the biggest discovery of the decade, Rio de Janeiro, Brazil News
All eyes remain fixed on Brazil's burgeoning pre-salt oil industry, photo by Petrobras.

After drilling the well into the pre-salt layer, the company confirmed the presence of 700 million barrels of high-grade oil and 3 trillion cubic feet of gas (the equivalent of 545 barrels of oil) – some 9250 feet (2.8km) underwater.

However, Petrobras has been dealt a blow by news that its plans for expanding its oil terminal in the Baía da Ilha Grande, in the south of the state, have been vetoed by the local government.

The company had wanted to build an extra pier to increase capacity for an extra four tankers to dock, along with eight storage tanks and three pipelines some 9.1km in length.

The reasons behind the refusal center on the importance of the region as a UN biosphere reserve and the area’s reliance on its fishing community, which employs 4,700 people locally.

The bay’s warm, calm waters are particularly important for the local fishing industry as they are vital for growing scallops.

Debate continues over whether royalties from oil produced by just a small number of states, of which Rio is one, should be shared more equally throughout Brazil, thus going back on previously signed deals.

Read more (in Portuguese).

* The Rio Times Daily Update is a new feature we are offering to help keep you up-to-date with major news as it happens.

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