Bloomberg News

Petrobras Raises Oil Output Target on ‘Unique’ Discoveries

June 03, 2011

(Updates with closing share price in fifth paragraph.)

June 3 (Bloomberg) -- Petroleo Brasileiro SA, Brazil’s state-run oil producer, raised its output target to 6 million barrels a day in 10 years as it develops deep-water fields in the Santos Basin, Chief Financial Officer Almir Barbassa said.

Petrobras, which currently produces about 2.6 million barrels a day of oil and natural-gas equivalent, previously expected to double output to 5.4 million barrels by 2020. The company, based in Rio de Janeiro, estimates the so-called pre- salt fields off Brazil’s southeastern coast hold potential reserves of 20 billion barrels, Barbassa said.

“This is a unique situation in the world,” he said at an event today in Rio. It’s “such a large concentration of discoveries.”

Petrobras last month cut planned investments in Santos Basin deep-water fields by about 32 percent to $73 billion through 2015 as it produces more than previously expected, accelerating output gains and cutting costs. The company estimates its Lula field in the basin has recoverable reserves of about 6.5 billion barrels, while the Brazilian government’s nearby Libra field has as much as 5 billion barrels.

Santos Basin also contains the Cernambi, Guara and Carioca fields.

Petrobras fell 0.7 percent to 23.78 reais in Sao Paulo trading. The stock has dropped 13 percent this year, compared with a 7.2 percent decline in Brazil’s benchmark Bovespa index.

--Editor: Carlos Caminada, Robin Saponar

To contact the reporter on this story: Peter Millard in Rio de Janeiro at pmillard1@bloomberg.net

To contact the editor responsible for this story: Dale Crofts at dcrofts@bloomberg.net


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