Brazilian state-run energy giant Petrobras (PBR) made its fourth oil and natural gas discovery in the same Santos Basin offshore block that yielded last week's Guara megafield.

Petrobras said that the Abare Oeste prospect tested positive for oil and natural gas. Abare West is the fourth well drilled in the BM-S-9 offshore block, which also includes the Carioca, Guara and Iguacu discoveries.

The announcement, made late Monday, will likely build on the excitement generated by last week's reserve estimate at Guara. Petrobras pegged recoverable reserves for Guara at between 1.1 billion and 2 billion barrels of oil equivalent, or BOE. The estimate restore some of the luster to the promising offshore oil patch, which had been tarnished by news of two dry wells in the region in July and August.

Petrobras is lead operator of the block, with a 45% stake. BG Group PLC (BG.LN) holds 30%, while Spain's Repsol YPF (REP) has the remaining 25%. Shares of all three companies rose last week on the Guara estimate.

BG Group was behind last month's disappointing news, when preliminary tests at the Corcovado-2 prospect failed to confirm the presence of hydrocarbons, despite signs of natural gas. That followed July's announcement by Exxon Mobil Corp. (XOM) and Hess Corp. (HES) of a dry well at the Guarani prospect.

The two dry wells were the first high-profile failures in the so-called subsalt region. The subsalt discoveries were made under a thick layer of salt in the Santos Basin, off the coast of Sao Paulo and Rio de Janeiro states. The oil lies under more than 2,000 meters of water and a further 5,000 meters of sand, rock and a shifting layer of salt, making development pricey and complicated.

Traces of oil and natural gas were discovered at Abare Oeste in 2,163 meters of water and at a total depth of 5,150 meters, Petrobras said. "The discovery was proved via oil, natural gas and carbon gas content sampling via a cable test carried out in reservoirs located at depth of some 5,150 meters," Petrobras said in a filing with stock regulators.

Petrobras has so far released estimates for three subsalt fields: Tupi, Iara and Guara. The three fields combined hold recoverable reserves of between 9.1 billion and 14 billion BOE.

The Santos Basin remains one of the world's most promising oil frontiers, compared with other recent discoveries. Recoverable reserves at Guara are nearly double the announcement earlier this month of the Tiber-1 prospect in the Gulf of Mexico.

Tiber-1, the deepest oil well ever drilled by the industry, will yield recoverable reserves of between 600 million and 900 million BOE.

Petrobras' U.S. unit, Petrobras America, holds a 20% stake in the discovery. BP PLC (BP) is the operator with a 62% stake, while ConocoPhilips (COP) has 18%.

-By Jeff Fick, Dow Jones Newswires; 55-21-2586-6085; Jeff.Fick@dowjones.com