Petrobras to Locate Santos Basin Business Unit HQ in SP State

Brazil's federal energy company Petrobras (NYSE: PBR) plans to set up headquarters in the port town of Santos in Sao Paulo state for the newly created Santos basin business unit (UN-BS) that will manage an E&P budget of US$18bn through 2010, a company spokesperson told BNamericas.

The new business unit is now temporarily located in Petrobras' Refinerķa Presidente Bernardes (RPBC) close to the industrial town of Cubatao in the state of Sao Paulo.

Petrobras announced the creation of the new business unit in early January. UN-BS will manage the development of the Mexilhao gas field and the BS-500 field, where the company has found gas and oil, as well as existing production wells such as Merluza, Lagosta, Cavalo Marinho and Coral, in which Petrobras has interests.

The new business unit will be headed by electrical engineer and Petrobras career professional Jose Luiz Marcusso, who has managed Petrobras' domestic E&P strategy since 2001.

However, the decision to create a new business unit in Sao Paulo rather than in Rio de Janeiro has drawn fierce criticism from Rio de Janeiro politicians and industry leaders, including the state's secretary of energy, Wagner Victer.

The Santos basin covers an area of 40,663 sq km stretching from Rio de Janeiro south to Sao Paulo, reaching as far as Santa Catarina state. Brazil's hydrocarbons regulator ANP has awarded exploration licenses for 70 blocks in the Santos basin to Petrobras and other companies.

Petrobras argues that 52% of the area covered by blocks under concession is in Sao Paulo state and 35% in Rio de Janeiro state, but Rio de Janeiro politicians say the most productive and promising blocks are in Rio de Janeiro state territory, where most of the oil support industry is located.

Petrobras organizes its oil and gas production and exploration activities into at least eight distinct business units, the Rio de Janeiro and Campos business units being the largest and most important.

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