Petrobras Pledges Oil Self-sufficiency Through 2015

Brazil's federal energy company Petrobras (NYSE: PBR) plans to develop its exploration portfolio to guarantee oil self-sufficiency through 2015.

"We are okay until 2015. The question is what happens after that," Petrobras E&P executive manager Paulo Mendonca said during the Rio Oil & Gas 2006 conference.

Petrobras estimates it will add new reserves of 10 billion barrels of oil equivalent (Bboe) in coming years to current proven reserves of 13Bboe, he said during a presentation of exploration programs.

Petrobras has a portfolio of 126 exploration blocks and 30 areas under appraisal with a combined acreage of 160,000 sq km, he said. This is about 60% of the combined area of all companies operating in Brazil.

Petrobras in the second quarter announced self-sufficiency as it reached output levels of 1.9 million barrels of oil a day. Since fuel consumption is due to rise some 3.1% a year, the company estimates a need to increase output 7.5% a year to meet local demand.

The increased output would take domestic production to some 2.9 million barrels of oil equivalent a day (Mboe/d) in 2011 and to 3.5Mboe/d in 2015.

"For this plan to become reality, you need a good portfolio, well-trained people and money," he said.


According to Petrobras' 2007-11 strategic plan, the company aims to invest roughly US$1.5bn a year in exploration compared to some US$500mn annually in recent years, Mendonca said. Another US$8.4bn a year will go toward production through 2011.

The company plans to invest in 42 exploration projects. Petrobras has lined up 29 projects for 2012-15, he said.

"This portfolio has been acquired in licensing rounds since 2002," he said. "About 75% of this is located in the southeastern region, but we are having a new look at promising basins outside that region."

The southeastern region includes the prolific Campos basin, which accounts for 80% of total oil production, plus the Santos and Espirito Santo basins.

But Petrobras also plans to increase activities in the Jequitinhonha and Para-Maranhao basins, Mendonca said.

"After Jequitinhonha, we will look more closely at the very promising Para-Maranhao basin," he said, pointing out the company has restructured its business unit there.


In addition, Petrobras is hiring new personnel.

"Retirement and lack of new hires brought our trained personnel levels to a dangerous low in 2001," Mendonca said.

New hiring policies increased the number of geologists and physical geologists to 1,250 in 2002 and by 2010 the company plans to raise the number of specialists to around 1,600, he said.

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