Brazil oil giant to boost output
Rio de Janeiro, March 21 : Brazilian state-controlled oil company Petrobras, which is striving to boost daily domestic crude and natural gas output to 3.4 million barrels of oil equivalent (boe) per day by 2017, said it plans to earmark 62 percent of its investments over the next five years to exploration and production.
"The company's priority is exploration and production of oil and natural gas," Petrobras CEO Maria das Gracas Foster said at a press conference in Rio de Janeiro.
The executive gave details of Petrobras' most recent five-year plan, which was approved last week by the company's board of directors and calls for investment of $236.7 billion over the next five years.
Of that total, 62 percent ($147.5 billion) will be earmarked for exploration and production, 27 percent ($64.8 billion) for refining, transportation and distribution, and 4 percent ($9.9 billion) for the company's gas and energy division.
Petrobras produced 2.4 million boe per day in Brazil in 2012 and expects that level of output to remain virtually unchanged throughout 2013.
The company, however, is projecting a sharp increase in output to 3 million boe in 2016, 3.4 million boe in 2017 and 5.2 million boe in 2020 as it ramps up production from promising, ultra-deep "pre-salt" fields.
As part of that goal, the 2013-2017 plan calls for $147.5 billion to be invested in exploration and production, up from $131.6 billion in the 2012-16 plan. Projected investment in refining, meanwhile, was lowered in the current plan to $64.8 billion, down from $77.4 billion in the previous one.
Foster said two refineries under construction will have been completed prior to 2017, referring to plants that could boost Brazil's refining capacity from 2 million bpd to 2.4 million bpd, and therefore the company can "give more priority to production."
Investment in the "pre-salt" frontier - which comprises a series of recently discovered, ultra-deep fields off the coasts of the southeastern states of Espirito Santo, Rio de Janeiro, Sao Paulo and Santa Catarina - is expected to boost that region's share of Brazil's total production from 10 percent at present to nearly 30 percent by 2017 and more than 35 percent by 2020.
"Petrobras currently produces 300,000 (boe) per day in the pre-salt with just 17 wells. That production in 2017 will be 1 million (boe) per day. In 2020, it will be 2 million per day. Pre-salt is a reality," Foster said.
But accessing those fields, so-named because they are located under, water, rocks and a shifting layer of salt at depths of up to 7,000 meters below the surface of the Atlantic Ocean, will be very costly and pose an enormous technical challenge.