Devon Signs Tax Incentive Agreements for Polvo Field

US independent oil company Devon Energy (NYSE: DVN) has signed tax incentives agreements with Brazil's Rio de Janeiro state government to develop the Campos basin's offshore Polvo field, the state government said in a statement.

The tax exemption covers equipment purchases and hiring of services from companies in the state.

Suppliers include local companies Ebse and Enaval, which will supply manifolds. Alfanave will provide support services.

The US$300mn development project could wrap up second quarter next year. Polvo could produce 50,000 barrels of oil a day.

Devon Energy announced commercial feasibility of Polvo in July 2005 in the BM-C-8 block located 100km from shore at water depths of 92-259 meters. Polvo is estimated to hold reserves of some 50 million barrels of heavy crude at 18-22 degrees API.

Devon will use a fixed platform linked to 11 oil production and four water injection wells. Most of the reserves will be exploited by 2012, according to the field's development plan presented to national hydrocarbons regulator ANP.

The US company holds 60% and operates the BM-C-8 block. South Korean oil company SK Corp has a 40% interest in the field, which was awarded to the partners in 2000, where oil discoveries were registered from 2001-05.

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