P-54 Cost 30% More Than Planned

Brazilian federal energy company Petrobras (NYSE: PBR) paid 30% more to build the P-54 oil platform than planned, company E&P director Guilherme Estrella told journalists in Rio de Janeiro.

Construction originally was to have cost US$650mn under the contract signed with Brazilian shipyard Mauá Jurong, but eventually rose to US$900mn.

P-54 was delivered 41 months after it was ordered, eight months longer than originally planned, Estrella said during the P-54 inauguration.

"The world of oil is not the same as it was 40 months ago. Steel prices rose and services, salaries and exchange rates have had a negative impact on prices," Estrella said.

Prices may start declining next year, Estrella said, adding construction timeframes also could get back on track.

"We propose building a platform in 37 or 38 months. The 33-month timeframe was not unfeasible but rather challenging," Estrella said.

P-54 will start producing oil in October, reaching its 180,000b/d production peak in mid-2008.

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