Mexilhao talks to wrap up by early March

Brazil's federal energy company Petrobras and Spanish oil company Repsol YPF should conclude talks for the development of the offshore Mexilhao gas field by early March.

Offshore staff

(Brazil)- Brazil's federal energy company Petrobras and Spanish oil company Repsol YPF should conclude talks for the development of the offshore Mexilhao gas field by early March.

This announcement was made by Petrobras E&P Director Guilherme Estrella, who added that the two companies are now analyzing the Santos basin field to estimate reserves and production potential. Initial estimates put Mexilhao's reserves at some 419 bcm and production at up to 15 MMcm/d.

The companies have been negotiating a partnership for the development of Mexilhao since the first half of 2005, and they are optimistic about the promise for substantial reserves there. Petrobras alone has set aside $18 billion to explore and develop the Santos basin through to 2010, and Mexilhao is one of five existing projects that will receive part of the investment.

Negotiations are nearly complete for the hiring of a fixed platform to explore the field. Petrobras is now preparing a tender to build a natural gas processing plant in the coastal town of Sao Sebastiao, 140 km from Mexilhao.

1/26/2006

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