By Patricia Maresch, Senior Contributing Reporter RIO DE JANEIRO, BRAZIL – Late last week Petrobras announced a long-awaited five-year investment plan of US$224.7 billion for the period between 2011-2015. The company thinks it can nearly triple its production, from around 2 million barrels per day to 6 million by 2020. Brazil’s government is Petrobras’ main shareholder, directly owning 54 percent, and it was Finance Minister Guido Mantega who had rejected the company’s first two investment plans. Petrobras building in central Rio de Janeiro, Brazil, photo by Petrobrás. Mantega reportedly thought Petrobras’ plans were too ambitious because the increase in expenditure would have to be funded either by increased borrowing or by raising fuel prices. As the federal government is battling inflation, it was determined to avoid such increases. The new and improved investment plan focuses primarily on the development, exploration and production of the ultra-deepwater pre-sal (pre-salt) oil fields off the southeast coast. The pre-salt area covers 112,000 square kilometers and stretches 800 kilometers, from the state of Santa Catarina, past Rio de Janeiro, to the state of Espirito Santo. The plan is being closely watched in Rio, as the oil industry has already been expected to bring R$7.9 billion in annual revenues to the country. And a recent, hard-fought agreement was reached to distribute oil wealth throughout the nation, but reserving a greater percentage for states involved in extraction and refinement. The pre-salt fields could potentially hold up to 50 billion barrels of crude oil. “National oil production will rise from an estimated two percent in 2011 to 40.5 percent in 2020,” a Petrobras statement read. The oil giant plans to drill sixty more offshore wells this year, twice as many as in 2010. In addition to the production of oil and gas, the new plan also envisages a broad program of industrial and educational innovations. An estimate from the federal government estimates that the new Brazilian oil fields will require 250,000 new professionals through 2016. Petrobrás president Sérgio Gabrielli after meeting with Finance Minister Guido Mantega, photo by Fabio Rodrigues Pozzebom/ABr. Petrobras is also investing heavily in deepwater drilling, since the pre-salt fields and gas reservoirs are buried under great quantities of salt and rock at depths as low as 7,000 meters below sea level. Reaching these reserves requires huge investment. Last May, Petrobras and Norwegian oil company Statoil signed a letter of intent to expand cooperation in exploration activities, to leverage Statoil’s technology for deepwater drilling and advanced recovery methods. After Petrobras, Statoil Brazil is the second largest oil producer in Brazil. In the first quarter of 2011 Petrobras reported a 42 percent jump in profit, driven by increased fuel sales and higher international oil prices and increased domestic fuel sales.The first-quarter net profit was R$10.99 billion (US$6.72 billion), up from R$7.73 billion one year earlier. Brazil’s current gas production has reached its limits though, and high demand may cause higher gasoline prices, says the CEO of Petrobras, José Sergio Gabrielli, in an interview with O Globo news channel. The greater demand, according to Gabrielli, is caused by the increased sales of hybrid cars and the reduced production of ethanol fuel. “The best solution for now is to import gasoline,” he said. 18 Responses to "Petrobras Unveils US$224.7B Investment Plan" Pingback: The Future News: Online and Print | The Rio Times Pingback: The Expat Dream | The Rio Times Pingback: Huge Underground River Discovered in Brazil | The Rio Times I Brazil News Pingback: Fuel Prices Rise with Inflation in Brazil | The Rio Times I Brazil News Pingback: OTC Brasil 2011 has Success in Rio | The Rio Times | Brazil News Pingback: Brazil Cuts Fuel Tax at Pump as Prices Rise: Daily Update | The Rio Times | Brazil News Pingback: Brazil Targets Unregistered Foreign Insurers | The Rio Times | Brazil News Pingback: Brazil Chevron Oil Spill Caused by Drilling | The Rio Times | Brazil News Pingback: Police Probe Chevron Rio Oil Clean-Up Accusations in Brazil: Daily | The Rio Times | Brazil News Pingback: Petrobras Refinery Accused of Polluting: Daily Update | The Rio Times | Brazil News Pingback: Sweet Skills | The Rio Times | Brazil News Pingback: Brazil's Petrobras Taps Maria das Graças Silva Foster as First Female CEO | The Rio Times | Brazil News Pingback: Petrobrás Donations to Bahia State Scrutinized in Brazil | The Rio Times | Brazil News Pingback: The São Paulo Oil Industry | The Rio Times | Brazil News Pingback: Sevan Drilling Celebrate Arrival of New Rig in Brazil | The Rio Times | Brazil News Pingback: Brazil Oil and Gas Salaries Jump 28 Percent: Daily Update | The Rio Times | Brazil News Pingback: Oil Royalties in 2011 Up 31% in Brazil | The Rio Times | Brazil News Pingback: Working Mothers in Brazil Earn Eleven Percent Earn Less | The Rio Times | Brazil News Leave a Reply Cancel Reply Your email address will not be published.