Brazil’s Oil Field Libra Will Cost US$ 80 Bi do Develop

Brazilian Petrobras Brazil’s biggest oil field, Libra, will cost US$ 80 billion to develop, according to a senior executive with France’s Total, one of five consortium members participating in the project. 

Total’s vice president of exploration and production for the Americas, Ladislas Paszkiewicz, made the estimate at the Rio Oil & Gas conference, happening now.

Libra, the first of Brazil’s pre-salt fields to have been auctioned off, holds reserves estimated at between 8-12 billion barrels of recoverable crude, according to official calculations.

Exploration rights to the field were awarded last year to a consortium made up of Brazilian state-controlled Petrobras, which has a 40% stake; Royal Dutch Shell, 20%; Total, 20%; and China’s CNPC and CNOOC, each of which has a 10% stake.

The consortium, the sole bidder in last October’s auction, paid a 15-billion-reais (roughly US$ 6.9 billion) signing bonus to the Brazilian treasury after obtaining the rights to the field for 35 years.

Under the contract terms, the companies will pay royalties and also deliver 41.65% of profit oil, (oil produced after subtracting out production costs) to the Brazilian government.

Despite the high costs of the project, Paszkiewicz said he expects Libra will deliver a return on the companies’ investment “for many decades.”

The pre-salt region is so-named because its reserves 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.

That offshore region, the main focus of investment by Petrobras, could vastly increase Brazil’s proved reserves and turn the country into a major crude exporter. The pre-salt area is governed by a special regulatory regime that allows only for production-sharing contracts, not outright concessions.

Mercopress

Tags:

You May Also Like

It’s 2008. The US Has Dragged the World into a Depression.

Today, Brazil and most South American countries in general are disconnecting from the United ...

Watch Dog Agency Says It’s Impossible to Send Anyone to Jail in Brazil Today

Jorge Hage, the head of Brazil’s equivalent of the GAO (Controladoria-Geral da União – ...

Brazil’s Perdigí£o Bullish on Arab Market

Perdigão, a traditional exporter of chicken to the Middle East, intends to start selling ...

Brazil Offers Low-Interest Loan for Capital Goods Purchase

Announced by the Brazilian Development Bank (BNDES) at the end of June, the financing ...

RAPIDINHAS

Considered by some one of the best Brazilian painters, Cândido Portinari has also been ...

UK Wants G8 to Be G13 with Brazil Included

UK Prime Minister Tony Blair is calling for the G8 group of industrialized nations ...

Brazil-USA: Bumpy Road Ahead

I foresee a deterioration of relations between the Bush administration and Lula’s PT version ...

Dollar Fall Will Not Deter Growth, Says Brazil

Brazil’s Minister of Development, Industry, and Foreign Trade, Luiz Fernando Furlan, reiterated that exports ...

Experts May Call It Speculation But Brazil’s Property Funds Have a Bright Future

The ongoing growth of Brazil’s property market has become ever apparent with some estimations ...

Brazil’s Central Bank Says Inflation Will Remain Stable

Prices in Brazil, both wholesale and retail, are signaling stability, according to the Focus ...