Petrobras End 2007 Brazil Reserves Rise To 10.818B BOE

RIO DE JANEIRO, Jan 15, 2008 (Dow Jones Newswires)

Domestic oil and gas reserves of Brazil's state-run oil firm Petroleo Brasileiro SA (PBR), or Petrobras, rose 2.3% last year, the company said Tuesday.

Petrobras' Brazilian oil and gas reserves rose to 10.818 billion barrels of oil equivalent, or BOE, at the end of 2007, from 10.573 billion BOE a year earlier, according to the strict criteria of the U.S. Securities and Exchange Commission, or SEC.

The SEC demands, among other requirements, that oil companies have firm oil sale contracts for new fields to be considered company reserves.

Recently announced massive oil reserves at Petrobras' ultradeep Tupi field in Brazil's Santos Basin don't count toward the company's Brazilian reserves yet. Petrobras in November had estimated reserves at Tupi at up to 8 billion BOE.

The increase in Petrobras' 2007 domestic reserves came as the company throughout the year incorporated new oil discoveries into its reserves by declaring them commercially viable, such as the Xerelete field in the Campos Basin. Petrobras also found new accumulations in already producing fields.

Of the domestic reserves, 9.138 billion barrels were from oil, Petrobras said.

Petrobras Brazilian production reached 708 million BOE in 2007, but the company incorporated 953 million BOE as new domestic oil and gas reserves during the year.

Petrobras said that its 2007 domestic oil and gas reserves would last for 15.3 years at current production levels.

The company's domestic reserves replacement ratio reached 135%, meaning that Petrobras replaced each barrel it produced with 1.35 barrels of new reserves.

Petrobras' domestic and overseas reserves combined rose to 11.704 billion BOE at the end of 2007, from 11.458 billion BOE at the end of 2006.

With that, Petrobras' overall reserves replacement ratio was 131% at the end of 2006. The company said its overall reserves would last 14.8 years at current output levels.

Contract revisions in Bolivia, as well as technical revisions in Ecuador and the United States reduced International reserves somewhat, Petrobras said.

According to the less strict criteria of the Society of Petroleum Engineers, or SPE, Petrobras' 2007 Brazilian reserves rose to 13.92 billion BOE, from 13.753 billion BOE a year earlier.

The SPE also accepts as reserves areas in earlier stages of development, yet reserves from Tupi aren't included in reserves according to the SPE criteria either.

According to the SPE criteria, Petrobras' combined domestic and overseas reserves at the end of 2007 fell to 15.01 billion BOE from 15.023 billion BOE at the end of 2006.

RIO DE JANEIRO, Jan 15, 2008 (Dow Jones Newswires)