Petrobras Eyes Areas for Expansion

With major investment planned for projects both in Brazil and the Gulf of Mexico, Petrobras is seeing significant results from decisions made 30 years ago.

Brazil's Petrobras outlined an aggressive program of exploration and development Tuesday at the Offshore Technology Conference in Houston. Petrobras' President Jose Sergio Gabrielli de Azevedo said the company currently is producing 2.3 million barrels oil per day, but expects that to increase to 3.2 million b/d by 2012 and thence to 4.2 million by 2015. In addition, he expects Petrobras' refining capacity to increase significantly with the addition of three new refineries by 2015. And, when a new natural gas pipeline is constructed in Brazil, Petrobras' natural gas production capacity will increase three-fold.

"The price of oil is very high with high volativity right now," Gabrielli said. "There is no fundamental reason for that to fall." As a result, Petrobras is looking at several new discoveries in Brazil. One of these area is the Santos Basin's pre-salt area, particularly the Tupi find. Located at a depth of 6,000 meters from water surface to the underground layers, and below a thick layer of salt, Petrobras hopes to put the Tupi pilot project online by late 2010. "We're currently developing the assessment plan of these new discoveries' potential and may be ready as early as next year to commence Tupi reservoir long duration tests," said Gabrielli.

Additionally, Petrobras plans to invest almost $5 billion in the United States mainly through its Cascade and Chinook fields in the Walker Ridge Quadrant of the Gulf of Mexico. The fields will be operated by Petrobras, which will be the pioneer company, both in the production of this reservoir in ultra-deep waters, and in using an FPSO (Floating Production, Storage and Offloading) platform in the region. Production is expected in 2010. Petrobras also has participated in the Saint Malo and Stones discoveries which are now in the assessment and study phase and are operated by Chevron and Shell, respectively.

At the recent lease sale by the Minerals Management Service (MMS), Petrobras was the highest bidder on 22 blocks in the central and eastern Gulf of Mexico with the focus on deep and ultradeep waters. When the new concessions are confirmed by MMS, Petrobras' exploratory project portfolio in the Gulf will add up to 369 blocks, of which 202 Petrobras is designated as the operator.

Closer to home, Petrobras is in the early design stages of several ethanol pipelines in Brazil with eventual plans to export ethanol to the world markets. "We have more than 40 years experience producing ethanol from sugar cane in Brazil," said Garbrielli. "Today in Brazil, new cars are fully flexible and can run on either ethanol or gasoline, depending on the owners' choice. Despite recent reports of food shortages elsewhere in the world, we have found that our experience with ethanol has increased food production and our production chain costs less because of ethanol."

Giabrelli said Petrobras, which won OTC's Distinguished Achievement Award for Organizations in 2001, is different from other companies since they didn't begin as an owner of oil reserves. "We had to go find the oil," he said, "We took risks with technology in the 1970s and trained a lot of people. Now, we're having a generational shift with young people making up two-thirds of the workforce coming into our company. We have a long-term commitment to our people." In the last five years, Petrobras has hired 23,000 people and plans on hiring 14,000 people within the next five years.  

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