Petrobras Abandons Deepwater Prospect In Brazil's Top Region

(Bloomberg) -- Brazil’s state-controlled oil company Petroleo Brasileiro SA has abandoned exploration at the Caramba prospect in a deepwater region that holds the country’s biggest discoveries.

Petrobras has returned the BM-S-21 concession, where Caramba is located, to Brazil’s National Petroleum Agency, the Rio de Janeiro-based producer said in an e-mail Wednesday. The company operated the concession in the so-called pre-salt region with an 80 percent stake. Galp Energia SGPS SA was its partner with a 20 percent stake.

The decision to return the area underscores how exploration in the deepwater region where Petrobras has had its most success finding and producing oil still carries risks. Output at pre- salt fields has surged to more than 800,000 barrels a day, about a third of Brazil’s total output, since extraction started in 2010.

Petrobras returned the concession on April 29 after finishing evaluations, the company said in the e-mail, without disclosing the reasons for the decision.

The producer has reduced investments for this year following a rout in oil prices. It is expected to unveil a “realistic” five-year business plan as early as June that still includes enough spending to continue increasing production levels, Mines and Energy Minister Eduardo Braga said at an event in Rio on Wednesday.

To contact the reporters on this story: Juan Pablo Spinetto in Rio de Janeiro at jspinetto@bloomberg.net; Yasmine Batista in Rio de Janeiro at ybatista@bloomberg.net To contact the editors responsible for this story: James Attwood at jattwood3@bloomberg.net Peter Millard

Copyright 2017 Bloomberg News.

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