By Luciana Magalhaes

Of Dow Jones NEWSWIRES

SAO PAULO -(Dow Jones)- Brazil's state-run oil company Petrobras announced late Friday the discovery of good-quality oil in an area called Sul de Guara, in the subsalt of Santos basin, the company said in a statement.

By contract, Petrobras has the right to produce up to 319 million barrels in the area.

The field is located within an area ceded by the Brazilian government as part of the firm's record-breaking 2010 share offer, in which it raised some $70 billion in fresh capital to develop the huge reserves found deep beneath the Atlantic Ocean floor off the country's southeast coast.

The well is located at 320 kilometers from the coast of the state of Sao Paulo, in an water depth of 2,202 meters.

-By Luciana Magalhaes, Dow Jones Newswires; +5511 3544-7072; luciana.magalhaes@dowjones.com