Petrobras Looks Southeast to Boost Reserves to 17bboe by '10

The offshore Espírito Santo and Santos basins are key for Brazil's federal energy company Petrobras (NYSE: PBR) to meet its target of having 17.3 billion barrels of oil equivalent (bboe) proven reserves by 2010, the company's exploration and production executive manager Paulo Mendonça said at the Rio Oil & Gas conference.

The company's current proven reserves stand at 12.6bboe. Petrobras is also targeting to raise its production to 2.3 million barrels of oil a day (mb/d) in 2010, up from some 1.6mb/d today.

"This means our challenge is to add about 5 billion barrels to the reserves in the next five years," he said, adding that in the last 10 years, Petrobras' finds have come to some 6.6bboe.

Petrobras seeks to secure acreage in Espírito Santo and Santos - the most promising basins in Brazil - that have strong evidence of containing significant amounts of light crude and gas.

In line with that strategy, either alone or with partners, Petrobras picked up a number of blocks in these two basins in Brazil's last licensing round.

The Campos basin provides over 85% of domestic production at the moment, but "it is becoming mature, since there are more producing fields than areas in development there," Mendonça said.

Large-scale production there started in the 1980s, and now most of the production platforms being built are destined for deepwater wells in the basin. Mendonça recognized that Campos may soon start facing a decline at a time when exploration in the neighboring Espírito Santo and Santos basins are yielding results.

In Espírito Santo, Petrobras has recently discovered light crude and gas at the Golfinho field, which is still under appraisal. The two main exploration areas in the region are the ESS 132 and the ESS 123 fields, the latter of which has estimated reserves of 450mboe with 40 degrees API light oil. Production potential is estimated at up to 25,000b/d. The Espírito Santo basin could have reserves of 1.8bboe.

In Santos, the company is concentrating exploration in the SPS 35 field near the Mexilhao field. Gas is especially promising there, with estimated reserves of 14.8 trillion cubic feet (tcf).

Although the company is also producing and looking for oil in offshore frontier areas such as the Foz do Amazonia, Camamu Almada and Sergipe Alagoas (which are all thought to contain light crude), Petrobras has concentrated exploration investments in the Espírito Santo and Santos basin.

From 1998 through end-March 2004, a total of 11.2bn reais (US$3.95bn) were invested in exploration in Brazil's 16 sedimentary basins, magazine Brasil Energia reported, saying that main investments were 4bn reais in Campos, 2.95bn reais in Santos and 1.34bn reais in Espírito Santo.

For Petrobras, the aim is to renew its portfolio by adding blocks in these two basins, where oil is found mostly in deep offshore waters.

The company's exploration portfolio is made of 149,000 sq. km., comprised of 42,500 sq. km. in Santos, 12,915 sq. km. in Campos and 10,935 sq. km. in Espírito Santo. The rest is in other basins.

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