Petrobras CEO Says Subsalt Viable at Less Than $45/Bbl

RIO DE JANEIRO (Dow Jones Newswires), Sept. 22, 2009

Brazilian state-run energy giant Petrobras (PBR) pegs development of recently discovered offshore oil fields as economically viable at a little less than $45 a barrel, CEO Jose Sergio Gabrielli said Tuesday.

"Today, from an economic point of view, the subsalt is already viable and will be even more profitable with greater knowledge that we will have of its capacity," Gabrielli was quoted by the Estado news agency as saying. "The subsalt is the future of Brazil."

Gabrielli made the comments during a seminar in Brasilia. Petrobras officials had previously said development of the ultra-deepwater fields was viable at about $35 a barrel.

The so-called subsalt discoveries were made under a thick layer of salt in the Santos Basin off the coast of Sao Paulo and Rio de Janeiro states. The oil lies under more than 2,000 meters of water and a further 5,000 meters under sand, rock and a shifting layer of salt

Petrobras currently has proven reserves of 14 billion barrels. Oil from subsalt fields Tupi, Iara, Guara and Parque das Baleias could have production of between 10.6 billion and 16 billion barrels, Gabrielli said.

"We could, in the medium term, take the available reserves to 25 billion barrels from 14 billion barrels just with known areas," Gabrielli said.  

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