Petrobras Beats Oil Production Record

By Doug Gray, Senior Contributing Reporter

RIO DE JANEIRO – Brazil’s energy giant Petrobras announced last week record-breaking oil production levels for the month of April, before further good news for shareholders came with the announcement by the National Petroleum Agency (ANP) of major new oil discoveries off the coast of Rio De Janeiro drilled by the Rio-based company.

The world’s eighth biggest company had a month to celebrate as April saw an average of 2.033 million barrels of oil per day produced across all of its Brazilian fields and wells, exceeding the previous monthly record of 2.004 million. That figure also represents a significant 2.9 percent increase over the same period a year ago, on top of which there were two consecutive daily records set on April 23rd and 24th.

As an indicator of their continued ascension on the world energy scene, Petrobras’ company forecast is to be producing over five million barrels per day by 2020, and their current $220 billion investment program is presently the biggest of any oil company in the world.

Having recently overtaken the likes of Chevron, Shell and BP in the rankings of the world’s largest energy companies, further good news came with the announcement of two huge new discoveries off the coast of Rio.

The 4.5 billion barrel potential of the ‘Franco’ well, part of the much-touted pre-salt oil deposits which in total could contain close to eighty billion barrels, represents more than a quarter of the country’s total proven oil reserves, and is the second largest pre-salt find thus far behind ‘Tupi’.

A second well, ‘Libra’, is also on the lips of the ANP who say it could contain as much if not more than Franco according to the first seismic data. Director Magda Chambriard told press that the discoveries have opened “a new front” for exploration in Brazil, but it will be October before the well is completed. The agency have hired Petrobras to drill for the oil lying some 3.7 miles below the sea floor, and the reserves are set to be swapped for stock in the state-run company as part of an ongoing effort to raise funds.

Petrobras’ share price has dropped by almost fifteen points since the start of 2010 with a dip in the price of crude oil, but the latest news could help spark something of a recovery. When the large reserves in the Santos basin were first announced Petrobras’ stock price increased by around 19 percent in one day, and while nothing so dramatic is on the cards this time around, the significant findings will certainly serve to bolster confidence on the market.

Meanwhile senators continue to debate the four major pieces of legislation regarding the distribution of both the pre-salt oil blocks and the potential revenue arising from them, including a social fund designed to offer the people of Brazil a slice of the enormous profits forecast.