Petrobras to Invest US$1.3bn in Northeastern Ops

Brazil's federal energy company Petrobras (NYSE: PBR) plans to invest 2.8bn reais (US$1.3bn) in 2006 in its Rio Grande do Norte and Ceara business unit (UN-RNCE) in northeastern Brazil to expand oil and gas production capacity, local press reported.

Of the total investment budget, 1.87bn reais will be invested in maintenance of operations and the rest will in expansion projects. UN-RNCE's 2006 budget is 6.7% more than that in 2005.

UN-RNCE covers the states of Rio Grando do Norte and Ceara, where 2.4bn reais and 400mn reais will be invested respectively.

The production expansion projects are part of program to expand UN-RNCE output to 110,000 barrels a day (b/d) of oil by 2009, local press reported. According to national hydrocarbons regulator ANP, production in the state of Ceara and Rio Grande do Norte currently stands at around 31,000b/d.

Petrobras will also invest to start exploration under UN-RNCE jurisdiction of the 35 new blocks in the Potiguar basin awarded to the company in 2005 in the seventh hydrocarbon exploration licensing round.

Investments in other projects include a third gas processing plant, gas transport pipelines, a second biodiesel plant and a jet fuel production plant. All the projects will be located in Rio Grande do Norte, newspaper Tribuna do Norte reported.

Petrobras will also carry out feasibility studies for a polyvinyl chloride (PVC) production plant in Rio Grande do Norte and a seaport terminal to ship products to its units in other states, local press reported.

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