Petrobras to Search for Subsalt Oil in Angola

RIO DE JANEIRO (Dow Jones Newswires), September 23, 2008

Petrobras will conduct seismic tests for subsalt oil deposits in Angola, the Company's Executive Manager said in Sunday's edition of the O Estado de Sao Paulo newspaper.

Petrobras' Samir Awad said that the Company will conduct seismic tests off the coast of Angola in 2009.

"It's possible that we could also discover oil there and, starting with seismic tests, we could know whether it's worth exploring the African subsalt layer," Awad said.

According to geologists, the South American and African coasts share geologic similarities, including a salt layer that covered deposits of organic material.

"Geologic similarities, however, may not generate great results," said Awad.

Petrobras and other oil companies have announced a series of discoveries in the subsalt layer off Brazil's coast, including the Tupi and Iara finds. Tupi and Iara, which both lay in separate areas of the BM-S-11 block, have estimated reserves of between 8 billion and 12 billion barrels of oil equivalent, according to Petrobras.

Despite Petrobras' interest in exploring Angola, the cost to develop the subsalt deposits in Brazil could pressure the company to rein in its overseas investments.

"It's an unprecedented discovery, and this could cause a rethinking of the international expansion strategy," Awad said.

Petrobras currently plans to invest $112 billion through 2012, although the company expects to soon release a revised strategic plan that will cover the 2009-2020 period. The current strategic plan doesn't include subsalt investments, which have been speculated to be more than $600 billion.

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