The plans are realistic because most of the development projects have started and Petrobras boasts strong finances. Further, Petrobras aims to place a number of platforms onstream and is developing fields in Campos and other basins.
"Most of [the increased production] will come from Brazil and that is doable," Moody's oil analyst Tom Coleman said. "The company publicly sets very aggressive production targets."
Petrobras in 2007 aims to invest 21bn reais (US$9.8bn), or 44% of the 47.5bn-real budget, in E&P. The company plans to produce 2.5Mboe/d by the end of 2007, up 13% from the 2.3Mboe/d estimated to have been produced at end-2006.
Of the total budget for E&P, Petrobras probably will invest some 3bn reais in exploration and the rest in production, according to the company.
Petrobras will continue developing several fields, including the start of commercial operations of four new platforms, some of which have been delayed from 2006, analysts said.
"The delays are normal and often are caused by bureaucratic problems," said Glberto de Souza, an analyst at Banco Espírito Santo.
The offshore production units scheduled to come online this year are the P-52 semi-submersible and the P-54 floating production, storage and offloading (FPSO) vessel in the Campos basin fields of Roncador and Jubarte respectively.
Petrobras also is preparing to put in place the SSP Piranema FPSO in the Sergipe-Alagoas basin's Piranema offshore field. The 100,000b/d Cidade do Rio de Janeiro FPSO vessel in the Campo basin's Espadarte field has started operations, Petrobras announced this week.
Together, these production units will have combined capacity to produce 480,000b/d, company information says.
Petrobras also pledged to continue development existing fields for which production units already have been or will be contracted this year.
Projects under construction include the 180,000b/d P-51 semi-submersible platform that will operate in the Campos basin field of Marlim Sul and the P-53 FPSO for Marlim Leste, also in Campos. The two are due to start operations in 2008 and 2009 respectively.
The company still must contract construction of two new production units: the P-57 FPSO and the P-55 semi-submersible for the Roncador field in 2010 and the Jubarte field in 2011 respectively.
Together, the two units will add another 900,000b/d to the company's offshore production capacity by 2011.
Although Petrobras will continue to concentrate its efforts in the prolific Campos basin - which accounts for more than 80% of the country's total output - the company also will start investing in other regions.
The company already has earmarked US$18bn for Santos through 2010.
The main Santos project is development of the 419Bm3 of reserves in the Mexilhão field. To this end, the company is investing in a gas-processing unit in the São Paulo coastal town of Caraguatatuba and is contracting a US$2bn fixed platform for Mexilhão that will start operations in 2009.
Petrobras also will invest in the Merluza field further south in the Santos basin to boost natural gas production to 2.5Mm3/d by 2008 from today's 1Mm3/d.
The company also will focus on the Espírito Santo basin, which lies north of Campos. There Petrobras is developing the Golfinho, Peroá-Cangoá and Canapú fields. Investments also are underway in onshore heavy crude areas in the basin.
Petrobras also will focus on Sergipe state, home to the Piranema light-crude field.
The company has included other basins in its plans but still is conducting exploration and appraising them for the possibility of commercial production.
In exploration, with a fattened budget of around US$1.5bn in 2007, the company will carry out work in 147 blocks in several other basins including the onshore São Francisco and Solimões.
Overall, Petrobras maintains a portfolio of more than 400 blocks, of which about half are producing and 10% are being developed for production.
The portfolio has the initial potential of containing 10Bboe reserves, or some 75% of Petrobras' 13Bboe proven reserves.
Analyst agree with Petrobras estimates, citing the end-2006 announcement of 19 commercially feasible areas with 2Bboe in reserves. This announcement topped the company's target of adding 1Bboe of new reserves a year to maintain an exploration life of at least 15 years.
"Petrobras has lots more oil to find," said BES's De Souza.
Petrobras' US$20bn in cash reserves and annual revenues that top US$5bn mean it needs to rely little on project financing, said Moody's Coleman.
But Petrobras still must keep an eye on prices due to a strengthening local currency, said Coleman.
Meanwhile, Petrobras' status as a state-controlled company with shares traded on local and foreign exchanges gives it extra security. The company is able to exploit its resources efficiently without too much state interference or government demand for revenues, he said.
"Unlike some the other state-controlled oil companies such as PDVSA [Venezuela] and Pemex [Mexico] in the region, Petrobras has a plan in place," Coleman said.
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