Petrobras to Keep Cutting Lifting Costs

Brazil's federal oil company Petrobras (NYSE: PBR) reaffirmed its intention to reduce lifting costs to 2003 levels from the US$4.03/barrel level seen in the third quarter 2004, exploration and production manger José Marcuso said in a webcast with analysts Tuesday.

Third quarter lifting costs fell from US$4.09/b in Q2, but are still well above the US$3.50/b the company reported for 3Q03.

Increasing output should improve the company's production costs. "Output has been rising and should continue [to do so]," Marcuso said.

Third quarter output rose to 1.52 million barrels of oil a day (mb/d) from 1.46mb/d in the second quarter, and is expected to increase further as the 150,000b/d P-43 floating, production, storage and offloading vessel (FPSO) starts producing at the Barracuda field in the Campos basin on December 10, he said.

P-43 left dockyards last Friday after a delay of about one month to meet safety standards. Its full output capacity will be reached 6-8 months after the start of production, Marcuso said.

On January 15, the P-48 FPSO is scheduled to start producing at the Caratinga field near Barracuda, he said. Petrobras produces some 80% of Brazil's oil needs and is striving to reach oil self-sufficiency in 2005. By the end of the first half of next year, the P-50 platform is scheduled to start production at the Albacora Leste field in the Campos basin, and by end-2005 the P-34 will come on line at the Jubarte field, Marcuso said. The P-50 should reach full output capacity by mid-2006, he said.

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