Brazil subsalt output to see early peak -minister
SAO PAULO, March 18 (Reuters) - Brazil's subsalt oil
production could shoot up in 2013 and 2014 before leveling off
to match production in other off- and onshore areas, Planning
Minister Paulo Bernardo said on Thursday. Output from the offshore subsalt region will grow slowly in
the next two years and jump significantly during 2013 and 2014,
Bernardo said in an interview with state television. He did not
provide estimates or give the source of his projections.
"Maybe in 2015 output at the subsalt region will be as
significant as production at our current sources of crude," he
added. "Subsalt production could even surpass" so-called
non-subsalt output in that year. State-controlled oil company Petrobras (PETR4.SA)(PBR.N)
has forecast subsalt production could match that of other
regions by 2020. Petrobras has been reviewing its $174 billion, five-year
investment plan.
Capital expenditures to develop the subsalt
region are massive, forcing Petrobras to borrow from state
agencies in China and Brazil and from investors in the bond and
loan markets to fund investment. Exploration costs in the subsalt region, where oil sits
about 7 km (4.3 miles) below the ocean seabed and a thick layer
of salt, about 300 km off Brazil's southeast coast, are
estimated by several investment banks at $400 billion.
Preferred shares of Petrobras, the company's most widely
traded class of stock in Sao Paulo, fell 0.8 percent to 36.92
reais in early afternoon trading on Thursday, compared with a
0.9 percent drop in the benchmark Bovespa stock index .BVSP.
The performance of the Petrobras stock has lagged that of
the Bovespa index over the past year on concerns the
government, which is revamping oil regulations to boost control
of massive offshore reserves, would overstretch Petrobras by
forcing it to invest too much, too fast to extract the subsalt
oil. According to Petrobras, subsalt output will be at 582,000
barrels of oil per day in 2015, and reach 1.81 million bpd only
by 2020. The company produced 1.97 million bpd in January.
Following is a table with Petrobras' current subsalt
production estimates through 2020:
===================================
YEAR OUTPUT (Thousands bdp) 2013 219
2014 368
2015 582
2016 959
2017 1,315
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