UPDATE 2-Petrobras has new light-oil discovery in Santos

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RIO DE JANEIRO, Aug. 7 (Reuters) - Brazil's state-run Petrobras (PETR4.SA: Quote, Profile, Research, Stock Buzz)(PBR.N: Quote, Profile, Research, Stock Buzz) announced on Thursday a new discovery of light oil with an API grade of around 30 in the Santos Basin, off the Sao Paulo coast.

The oil was found in the Iara field, controlled 65 percent by Petrobras, 25 percent by the BG Group (BG.L: Quote, Profile, Research, Stock Buzz) and 10 percent by Portugal's Galp Energia (GALP.LS: Quote, Profile, Research, Stock Buzz), the company said.

The new find was near the Tupi field, where Petrobras has estimated recoverable reserves at between 5 billion and 8 billion barrels -- which would be one of the world's biggest oil discoveries in the past 20 years.

The company, Brazil's biggest, has been intensfying its drilling activity in the sub-salt area, which geoloogists say could have the potential for 70 billion barrels or more.

It said the new find was 230 kilometers (142 miles) offshore from Rio de Janeiro at a depth of 2,230 meters (7,330 feet). It gave no information on the possible quantity of the newly discovered oil.

"The well is still being drilled in search of deeper targets," the company said in its statement.

Experts agree that the sub-salt production may be technically challenging and costly, partly because salt movement requires reinforced piping, which can still be damaged. Production from above the salt level is easier.

Analysts are bullish on Brazil's oil potential, expecting the country to become a major world oil producer in the next decade. Brazil already produces enough to meet its net oil needs of about 1.8 million bpd, and exports some crude.

Petrobras shares earlier closed 1.68 percent higher at 33.86 reais. (Reporting by Denise Luna; writing by Stuart Grudgings; Editing by xxxx)