Petrobras Inaugurates Santos Basin HQ

Brazil's federal energy company Petrobras (NYSE: PBR) has inaugurated the headquarters of its new Santos basin business unit in Sao Paulo state port town Santos, Petrobras said in a statement.

The business unit, known as UN-Bacia de Santos, was created to manage one of most promising oil districts in Brazil - Santos - where the company plans to invest US$18bn through 2015. The basin is expected to produce 30 million cubic meters a day (MM3/d) of natural gas.

The company plans to hire about 570 people to work in the unit to develop three operational areas: the Merluza field region in the Santos basin's south off the shores of Santa Catarina state; the Mexilhao region in areas close to Santos; and the northern region, where the company has discovered oil in the BS-500 block.

Petrobras aims to expand output in the Espírito Santo and Santos basins as part of its plan to produce 2.3 million barrels a day (Mb/d). The company produces 1.8Mb/d, mainly from the mature Campos basin.

Recent discoveries in the 54,000 sq km Santos basin include the following fields: Mexilhao, estimated to contain 419 billion cubic meters of natural gas; BS-500, which is being appraised; BMS-10; and BMS-11.

Petrobras has about 69 exploration blocks in the Santos basin totaling up to 13,000 sq km.

Investments also include a gas treatment terminal in the port city of Caraguatatuba and pipeline infrastructure to carry the gas into the existing pipeline network in Sao Paulo state.

Initially investment will be slow since development of the Mexilhao field is expected to take off from 2008 onwards because of equipment constraints, company officials have said.

Investments through 2011 will therefore be some US$3-4.5bn: US$1-1.5bn in exploration and some US$2bn-3bn in production, newspaper O Estado de S Paulo quoted company E&P director Guilherme Estrella as saying.

By 2011, the company aims to be producing 100,000 barrels a day (b/d) of oil in the basin and 2.5Mm3/d natural gas a day from current levels of 10,000b/d and 1Mm3/d respectively.

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