Petrobras Could Hire Additional Production Rigs

Petrobras is considering hiring as many as three additional rigs for production of a recent discovery of light crude, a top company official said on Friday. Exploration and production director Guilherme Estrella told reporters the rigs would be used mostly in the Espirito Santo basin, where Petrobras estimates show potential reserves of 400 million barrels of light oil, rare for Brazil.

He estimated early production should start in the second half of 2005. The rigs should have a production capacity of 100,000 barrels per day.

Despite the expected new oil, Petrobras will maintain its production targets up to 2006, when it hopes to reach output levels guaranteeing Brazil's self-sufficiency in oil.

The construction of its two new 180,000 bpd rigs meant for production off the Rio de Janeiro state coast has been delayed, and company officials have said they may even abandon plans to bring in the two platforms due to new high Rio state levies.

That is one of the reasons Petrobras is actively seeking oil in other regions. Now, Rio's Campos basin accounts for over 80 percent of Petrobras output.

Petrobras hopes to boost its oil output at home to 1.82 million bpd in 2005 and to 2.22 million bpd in 2007 from about 1.6 million bpd now. Brazil now consumes about 1.8 million bpd but expected economic growth should fuel oil consumption.

Petrobras should invest between $4 billion and $5 billion in exploration and production next year, about the same as in 2003, Estrella said.

He said the company was still outlining its strategic plan for 2004-2010, which should be ready in March and make light oil exploration and production a priority. Out of 6 billion barrels of hydrocarbon reserves in oil equivalent discovered so far this year, light oil accounted for 1 billion barrels.

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