Petrobras Receives Rig Permit

Brazil's environmental authority should issue a license this week for Petrobras to start operating a new offshore rig after long delays which already affected production plans. Carlos Henrique Mendes, head of the government's environmental agency Ibama in Rio de Janeiro, said Tuesday the document should be ready by Friday.

"There are no motives now not to allow them to use the rig. We have an understanding, all the issues should be completely resolved by Friday," he said. A month ago, Petrobras officials said that production year-end output target would be off by 2-3 percent due to delays in obtaining the license. These delays would lead to a loss in production and profits of about 4 percent this year. Petrobras had already been forced to revise down its 2001 average production target to 1.39 million barrels per day from 1.42 million bpd after the P-36 production rig sank in March. The output should now total about 1.35 million bpd for the year. Despite a lower forecast, this year's production is still expected to top last year's 1.27 million level.

The license would allow the new P-40 oil production rig and the P-38 storage platform to start operating at the Marlim Sul oil field in the oil-rich Campos basin. P-40 should reach its full 150,000 bpd capacity in late 2002. The P-40 platform, received in January, had been initially due to start working by mid-year. Ibama's Mendes explained that in September, the agency discovered that Petrobras had installed the pipeline infrastructure for the rig without Ibama's approval even before the platform arrived. "I believe, Petrobras will have to pay a fine for that. But the issue is now resolved and it's no longer an obstacle for the license. The company also made some modifications to the rig to meet Ibama demands."