OTC 2002 -- Petrobras chief outlines company outlook
  from: Jerry Greenberg
  by: OilOnline
  Tuesday, May 07, 2002

Petrobras President Francisco Gros said the state oil company is looking at a $31.6 billion capital expenditure budget through 2006 but the budget could possibly be front-end loaded with as much as $10 billion being spent on E&P projects worldwide in 2002.

The average daily production goal of 1.5 MM b/d was achieved in March. This figure surpasses the production goal set for 2002, and is a good starting point for reaching the 1.9 MM b/d production goal set for 2005, Gros said. He said development programs are already underway to reach that goal, relying on already discovered reserves in the Campos Basin.

Proven domestic reserves currently stand at 9.67 billion barrels of oil equivalent. That figure is projected to increase to 11.7 billion barrels by 2005.

Production from deep and ultra-deepwater is approximately 1 MM b/d, all from the Campos Basin where the over all average production, including shallow waters, is not 1.2 MM b/d and increasing. Offshore production accounts for 83% of all oil produced in the country.

Brazil’s most prolific well is the Marlim Sul 42 in 4,003 ft of water in the Campos Basin. The well produces an average of 37,000 b/d of oil from a 1,640 ft horizontal section of the well.

In the Roncador field, Petrobras recently set a world water depth record for installation of a subsea gas lift manifold in 6,184 ft.

A new emphasis on ultra-deepwater exploration is expected to begin soon in the Santos Basin south of the Campos Basin. Petrobras concluded 3D seismic surveys in the area. Expectations for the area are high as the size of the blocks are eight times that of the production ring in the Campos Basin, according to Gros.

This year, Petrobras expects to drill as many as 30 wells in water deeper than 3,281 ft and 18 in water depths greater than 6,562 ft. This compares with 36 deepwater and ultra-deepwater wells drilled during 2001.

To develop the deepwater finds, Gros said the company is pursuing all available opportunities regarding floating production systems for the deep and ultra-deepwater areas, including leasing or building a new FPS. Petrobras recently received three proposals for a new FPSO and bidding results are expected in about 30 days, Gros said.

Outside the country, Petrobras produces approximately 600,000 b/d of oil, however, the company’s goal is to produce as much as 300,000 b/d by 2005, which is "very achievable", Gros said.

Petrobras earmarked $7 billion of its $31.6 billion CAPEX for international expansion and will continue to target deepwater West Africa, Latin America and the US Gulf of Mexico, where it produces about 10,000 b/d presently.

In the US Gulf, Petrobras is investing in E&P and has been active in recent lease sales. The company is also looking at acquisition opportunities in the US Gulf "but doesn’t see too many bargains around now," Gros noted.