Petrobras sees Tupi lifting costs below $8.20/bl
By Walter Brandimarte
NEW YORK, June 10 (Reuters) - Brazilian oil company Petrobras forecast lifting costs in its Tupi oil field will be lower than its current average $8.20 a barrel by the end of 2010, when the giant subsalt reserve is expected to start producing some 100,000 barrels per day (bpd).
A long-term production test of the wells at Tupi is set for the first quarter of 2009. The test will see between 20,000 and 30,000 bpd pumped from the field.
Assuming test production is successful, Petrobras plans to install a 100,000 bpd capacity floating production storage and offtake (FPSO) facility at Tupi by late 2010 to begin early production.
During test production, lifting costs will exceed Petrobras' $8.20 a barrel average, Chief Executive Jose Sergio Gabrielli said in New York on Tuesday.
"But we are going to lower our lifting cost," Gabrielli told reporters after a presentation to investors organized by the Brazilian-American Chamber of Commerce.
Petrobras (PETR4.SA: Quote, Profile, Research)(PBR.N: Quote, Profile, Research) estimates Tupi to have recoverable reserves of 5 billion to 8 billion barrels, which would make it one of the world's biggest oil discoveries in the past 20 years.
The Brazilian giant is partnered in the field with Britain's BG Plc (BG.L: Quote, Profile, Research) (25 percent) and Portugal's Galp Energia (GALP.LS: Quote, Profile, Research) (10 percent).
Two wells have been drilled at Tupi, the first of which cost $240 million and took 14 months to complete, Gabrielli said.
"Today we are drilling in two to three months, and the cost is between $60 million to $80 million each well," the executive said.
To keep up with its production plans, Petrobras is starting a bid process for the construction of 28 new drilling rigs. The units will be required to be Brazilian-made and will be delivered between 2013 and 2017, Gabrielli said.
The executive said, however, that Petrobras "cannot assure" it will duly follow its expansion schedule,
"But we will aim at being on time and on budget," he answered when asked about the possible delays caused by current strong demand for oil industry services and equipment.
HIGH PRICES FOR FIVE YEARS
Gabrielli also forecast oil prices will continue high and volatile over the next five years because of strong demand from emerging countries like China and India.
"We are in a demand-driven market right now," he said, adding that oil producers cannot increase their output in the short term either.
According to the executive, a weaker dollar is also supporting oil prices, which reached an all-time high of more than $139 a barrel in the United States on Friday.
The weaker dollar has been cushioning the impact of higher oil prices in fast-growing emerging economies, many of them with strong currencies, Gabrielli said.
"Given that, we can not expect a very big change on the demand side in the short term," he forecast. (Additional reporting by Robert Campbell; editing by Jim Marshall) |
