New Oil Discovery in Brazil May Change Way Petrobras Does Business

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Petrobras headquarters in Rio de Janeiro, Brazil The international director of the Brazilian state-controlled oil multinational Petrobras, Jorge Zelada, would not comment on the impact of the news disclosed this Monday, April 14, by the director general at the National Petroleum, Natural Gas and Biofuel Agency (ANP), Haroldo Lima, that the company would have discovered another huge oil field in the Santos Basin.

Early today, April 15, however, over breakfast with journalists at the company headquarters, he admitted that the company might re-evaluate its investment plans, should new viable reserves be confirmed.

"Should new discoveries be confirmed in Brazil, then we are going to make an assessment of our portfolio. The company is not segmented, our business portfolio is evaluated as a whole," he declared.

The company has been broadening its foreign investments, and the executive was questioned as to whether the confirmation of new reserves might turn the international growth strategy around, ascribing priority to domestic affairs.

Yesterday, Haroldo Lima stated that according to unofficial data, the field known as Carioca, in the Santos Basin, could contain 33 billion barrels of oil equivalent. Just to have an idea, proven reserves in Brazil currently total 12 billion barrels.

Petrobras has not confirmed the discovery yet, and it informed that further study is needed at the site. The company discovered oil in the field last year, but according to Zelada, other wells must be drilled to determine the exact size of the reserve.

The Petrobras plan forecasts investment of US$ 112 billion until 2012, of which US$ 15 billion would go to international business. Of that amount, according to Zelada, 70% will go to exploration and production, and 25% to refining.

Currently, the company produces 245,000 barrels per day in foreign countries and refines 140,000 barrels per day. Foreign refinement capacity, according to the executive, should total 330,000 barrels per day in 2011.

To give an example of the growing importance of the foreign sector, Zelada claimed that in 2003 Petrobras invested US$ 1 billion abroad, but that the total forecasted for this year is US$ 4 billion.

Anba – www.anba.com.br

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