Petrobras, Vale Make Oil Find

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Petrobras, Brazil's state-controlled oil producer, and mining giant Vale, said they have found signs of oil at an exploration block the two companies are working on together. The discovery was made 1.35 miles below the ocean's surface in the ES-M-527 region contained within the BM-ES-22 bloc, off the coast of Espirito Santo state near Rio e Janeiro.

Petrobras (PBR) and Vale (VALE), the world's largest iron ore producer, agreed to bolster their exploration partnership for oil and natural gas in 2009. The two companies work on more than 20 blocks together.

Vale, the country's largest single consumer of energy, bought a 25 percent stake in the block from Petrobras a year ago, Reuters reported. Vale also has a 10% stake in a neighboring block that is controlled by Petrobras. Vale has been said to be interested in working with Petrobras on some of Brazil's pre-salt fields.

Vale has previously said it is looking to increase its spending on natural gas exploration as the company looks to boost consumption of the fuel to power its mills. The company said in 2009 it would convert its locomotives from diesel to natural gas.