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Pre-salt shies Petrobras from foreign plays

02nd November 2012

Petrobras pre-salt development requires USD 14.8bn from the sale of foreign assets and projects

Pre-salt shies Petrobras from foreign plays
Projects on sale include exploration blocks in the Gulf of Mexico, as well as two refineries, one in the US and the other in Japan

As Petrobras is increasingly more focused on the development of its promising pre-salt reserves, its appetite for international exploration and production moves is decreasing as a result.

The company’s USD 236.5bn business plan includes the disinvestment of several projects outside of Brazil which the company hopes will generate USD 14.8bn to go directly in to the exploration of the pre-salt area.

Projects on sale include exploration blocks in the Gulf of Mexico, as well as two refineries, one in the US and the other in Japan. In the US, the state-run energy company also has a stake in over 170 exploratory blocks – most in deep waters – and is the operator in more than a hundred.

"Getting rid of refining as well as exploration and production assets abroad signals a change in the company’s strategy, as now it is turning toward meeting domestic demand and developing the pre-salt,” says oil analyst at Brazilian market analysis firm Tendências Walter de Vitto.

The oil giant plans to reach a production of 5 million barrels per day by 2020. Most of this output is expected to come from new offshore areas to be explored in the coming years, particularly new pre-salt areas which are due to go on auction next year.

However, the recent news of a 1 per cent decline in Petrobras' oil and gas production in the first 9 months of 2012 will likely spur industry analysts to view the giant's ambitious goal with skepticism.

Brazil’s vast pre-salt reserves could turn the country into one of the world’s top oil exporters, as they hold an estimated 100 billion barrels of high-quality recoverable crude. Pre-salt output currently accounts for 10 per cent of oil production.

 

 

 

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