BNDES: Requests for Oil-Field Innovation Loans at $1.3 Billion

RIO DE JANEIRO--Brazil's National Development Bank, or BNDES, said Thursday that demand for funding to produce state-of-the-art technologies to develop recently discovered offshore oil fields had nearly reached expectations.

Loan applications for projects under the Inova Petro program reached 2.7 billion Brazilian reais ($1.3 billion) in the first phase. Initial funding for Inova Petro, announced in August, was placed at BRL3 billion through 2016.

Inova Petro aims to boost technology development needed for state-run energy giant Petroleo Brasileiro (PBR, PETR4.BR), or Petrobras, to produce oil from the subsalt region, a cluster of oil fields found more than four miles deep off the southeast coast of Brazil.

The program is also designed to help support Brazil's nascent oil and natural gas supply chain, which will need to expand rapidly to meet demand for products and services under stringent local content rules. Brazil concession contracts require a certain percentage of goods and services used in oil exploration and production to be produced locally.

Companies submitted 58 projects for approval in the first phase of the program, with the approved projects expected to be announced Jan. 15.