Chevron to Target Brazil Subsalt for Exploration

RIO DE JANEIRO (Dow Jones Newswires), May 5, 2009

Chevron Corp. plans to drill wildcat wells in the promising subsalt region of Brazil, the president of the U.S. oil major's African and Latin America region said Tuesday.

Chevron's Ali Moshiri was quoted by the Estado news agency as saying the company wants to target the offshore region. Chevron has so far been one of the few majors operating in Brazil without a subsalt discovery.

"Brazil is the future (for the oil industry). It doesn't matter if it's above or below the salt, the potential is big," Moshiri said. The executive made the comments at the Offshore Technology Conference in Houston.

Chevron expects to start production at its Frade field in the second half of 2009, producing about 90,000 barrels a day. Chevron holds a 51.7% stake in Frade, while Brazilian state-run oil company Petrobras (PBR) has a 30% share and private consortium Frade Japao retains the remaining 18.3%.

According to Moshiri, Chevron wants to bring Frade onstream and then start drilling subsalt wells.

"Petrobras has been very encouraging in this aspect," Moshiri said. "We want to evaluate all the concessions that we hold."

In addition to Frade, Chevron also holds stakes in fields such as Papa Terra, Maromba, Atlanta and Oliva. Platforms are being ordered for Papa Terra, while the other fields are under evaluation or in development phases.

Chevron would like to use a similar development scheme as Petrobras, connecting subsalt wells to platforms already located at producing fields above the salt layer.

Petrobras, for example, connected Brazil's first producing subsalt oil well to a platform at the Jubarte field. The subsalt reserve at Jubarte is now producing 50,000 barrels of crude a day.

Despite the economic crisis and stunning slide in oil prices, Moshiri said Brazil's economic and political stability made the country attractive.

"Brazil is the only country in the hemisphere that has the conditions to maintain and grow investments," Moshiri said.  

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