Petroleo Brasileiro SA (Petrobras) will invest $29.4 billion by 2005 to become self-sufficient in crude oil production.
That spending target breaks out as 82% in Brazil and the balance abroad. Petrobras Pres. Henri Philippe Reichstul said 89% of the investments will be funded by Petrobras's own financial resources and international loans. The remainder will be funded via project financing.
The target is to increase oil production to 1.9 million b/d by 2005 from 1.3 million b/d now, with most of that crude feeding Petrobras refineries. The Brazilian state oil company owns 11 of Brazil's 13 refineries. Petrobras imports 250,000 b/d of oil products and estimates that Brazil will import 500,000 b/d by 2005. "This justifies the construction of two new refineries, probably by the private sector," said Reichstul.
In a bid to cut expenses, the company is working to reduce lifting costs to $2.80/bbl from the present $3.60/bbl and refining costs to 80¢/bbl from $1.02/bbl.
In addition, this year Petrobras plans to complete construction of 10 of the 30 natural gas-fired electric power generation plants it will place in service by 2005. The 30 plants will cost $7 billion, with most of the funds coming from the private sector.