Petrobras to invest $800 million outside Brazil this year, $5.1 billion by 2007

Aug. 8, 2003
Brazil's state-owned Petróleo Brasileiro SA (Petrobras) plans to increase and diversify investments outside of Brazil, investing $800 million this year and $5.1 billion by 2007, Nestor Cerveró, Petrobras's international director, told OGJ.

By Peter Howard Wertheim
OGJ correspondent

RIO DE JANEIRO, Aug. 8 -- Brazil's state-owned Petróleo Brasileiro SA (Petrobras) plans to increase and diversify investments outside of Brazil, investing $800 million this year and $5.1 billion by 2007, Nestor Cerveró, Petrobras's international director, told OGJ.

"Outside Brazil, the company (currently) produces 258,673 boe/d and is working to reach 500,000 boe/d by 2007," Cerveró said. "Up to now the company's international division was only prospecting in eight countries, including the US Gulf of Mexico. Now the company is going to expand its activities in Nigeria and (will) bid in Iran."

Nigeria
Although Petrobras currently is not producing oil in Nigeria, the blocks in which it has a stake will come on stream in 2007, said the director.

For example, Petrobras is participating in a production sharing agreement in Agbami field on Block OPL 216 off Nigeria for concessionaires Nigerian National Petroleum Corp. and Famfa Oil Ltd. (Nigeria). ChevronTexaco Corp. affiliate Star Deep Water Petroleum Ltd. is operator with 80% interest, and Petrobras holds 20%, said Cerveró. Petrobras will invest $450 million of the reported $3 billion analysts say the two companies will invest in Agbami.

Block OPL 216 is 105 km off Nigeria in the Niger Delta basin of the Guiné Gulf. Agbami field is in water 1,400-1,550 m deep and will be developed with a. floating production, storage, and offloading vessel, added the director.

Agbami partners are moving ahead with the bidding process, which will lead to an award of contracts for the FPSO and for construction and installation of subsea production facilities, reported ChevronTexaco. With estimated reserves of a billion boe, Agbami is expected to produce 60,000-100,000 b/d of sweet, (45º gravity) oil with no contaminants. It would peak at 250,000 b/d, said Cerveró.

The discovery well Agbami-1, completed in January 1999, encountered 420 ft of net pay in multiple zones (OGJ, Jan. 11, 1999, p. 9).

Agbami field ranks among the largest single discoveries in deepwater West Africa, with a structure spanning 2,568 sq. km that straddles Blocks OPL 216 and Statoil Nigeria-operated OPL 217.

"The percentage of participation of companies in the development and production of Agbami field is not yet defined because of the characteristics shared by Blocks 216 and 217. Negotiations for uniting the two blocks are under way, and the participations may be announced after the signing of the accord, expected to take place by yearend," said Cerveró.

Petrobras also has a stake in Block OPL 246, where the concessionaire is South Atlantic Petroleum Ltd. (Nigeria) and the investors in a production sharing agreement are Total Upstream Nigeria Ltd., operator with 60%, and Petrobras 40%.

In Block OPL 250, the operator is ChevronTexaco unit Chevron Nigeria Deepwater Ltd. unit 50%, Shell Nigeria Offshore Prospecting Ltd. 35%, and Petrobras 15%.

Petrobras, with 75% interest, operates Block OPL 324, and the local company Horizon Oil currently holds the remaining 25%.

Iran
Petrobras international division's interest in exploring and developing oil fields in Iran is an effort to regain a foothold in the Middle East, 24 years after having stopped to explore for oil in Iraq.

Petrobras bought geological packages from National Iranian Oil Co. to bid for exploration and production in two of eight blocks being offered in Iran. If its bid is successful, Petrobras will seek partners, said Cerveró..

This tender has opened Iran to Petrobras and other companies such as Italy's Agip SPA, Spain's Repsol-YPF SA, Norway's Norsk Hydro AS and Statoil ASA. The invitation to bid, promoted by the Iranian government, is the first of its type in 20 years.