Petrobras Oil, Gas Output Jumps to Record after Slumping During Repairs

Reuters

RIO DE JANEIRO, July 11 (Reuters) - Brazil's state-led oil company Petroleo Brasileiro SA said Monday that new wells helped push oil and natural gas output to a record high in June after falling to two-year lows in recent months because of platform maintenance.

Petrobras, as the company is known, produced an average of 2.90 million barrels of oil and natural gas per day (boepd) in Brazil and abroad during the month, 5.53 percent more than a year earlier and 2.35 percent more than in May.

The company is working to revive output and meet its annual production targets after several months of decline, Solange Guedes, the company's top exploration and production official, said on Monday in a telephone interview.

Meeting targets are part of Petrobras's efforts to revive investor confidence in the face of a massive corruption scandal, the industry's largest debt and falling investment.

Despite more than a decade of investment targets that soared to more than $45 billion a year only two years ago, it has failed to meet production targets and startup deadlines.

In March output slipped to 2.55 million boepd, the lowest monthly average since February 2014.

Domestic oil output, the bulk of Petrobras production, was 2.20 million barrels a day (bpd), the third-highest level on record.

Still, recent maintenance and declining output from the offshore Campos Basin and from on-shore fields in Brazil has cut average daily output in the first six months of 2016 to 2.06 million bpd. This is well below the 2.15 million bpd average domestic oil output the company hopes to reach this year.

To meet the target, Petrobras will need to produce 2.24 million barrels a day on average over the next six months, Diego Mendes, oil and gas analyst for Itau BBA in Sao Paulo, said in a report to investors.

Several Petrobras production ships coming on line in the coming weeks should allow the company to meet its goals Mendes said.

Guedes said the company's floating, production, storage and offloading ship (FPSO) named Cidade de Saquarema could begin operations in the Lula Central field this month and that she expects that Cidade de Caraguatatuba FPSO in the Lapa field to start operations in August.

(Reporting by Marta Nogueira and Jeb Blount; Writing by Jeb Blount; Editing by Chizu Nomiyama)

Copyright 2016 Thomson Reuters. Click for Restrictions.

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