Bloomberg News

Petrobras Lifts Franco Field Estimate to 4 Billion Barrels

August 01, 2011

(Updates with previous reserve estimates for Franco field in second paragraph, share price in last paragraph.)

Aug. 1 (Bloomberg) -- State-controlled Petroleo Brasileiro SA’s Franco oil field, acquired from Brazil’s government last year, holds about 4 billion barrels of recoverable oil and natural gas, Chief Executive Officer Jose Sergio Gabrielli said.

In September, Rio de Janeiro-based Petrobras and the government lowered estimated reserves for Franco to 3.1 billion barrels from an initial forecast of about 4.5 billion. Gabrielli spoke today at an event in London.

Last year, Petrobras paid the government $42.5 billion for the rights to produce 5 billion barrels of oil from Franco and six other fields in the so-called pre-salt region of the Santos Basin. Petrobras plans to invest $12.4 billion over the next five years to explore and develop those fields.

The company aims to double proved reserves by 2020 as it develops Franco and other deep-water domestic discoveries. Petrobras expects to produce 845,000 barrels a day in 2020 from Franco and other fields it bought last year as part of a $70 billion share sale, the largest in history.

Petrobras rose 0.5 percent, or 12 centavos, to 23.62 reais at 9:54 a.m. New York time. The stock has fallen about 13 percent this year, compared with a 15 percent drop in the benchmark Bovespa stock index.

--Editors: Robin Saponar, Dale Crofts

To contact the reporters on this story: Karen Eeuwens in London at keeuwens@bloomberg.net; 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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