Offshore staff

(Brazil)- As part of its continuing expansion plans in South America, Petrobras has announced several new upstream projects in Colombia, Argentina, Ecuador and Venezuela.

Last month, the Brazilian NOC announced plans to invest $3.3 billion in South America from January 2007-December 2011. The company has earmarked a total of $12 billion for all operations outside Brazil.

Seventy percent of Petrobras' budget is for upstream operations. The offshore investment contenders in South America include Colombia and Argentina.

Petrobras has been operating in Colombia since the early 1970s, and this year it plans to invest $150 million there. Offshore investments include the deepwater Tayrona field off the Caribbean shore, where drilling will commence in the second half of 2007.

In Argentina, the company is addressing its dwindling oil and gas reserves there by reportedly exploring new frontier basins. Exploration efforts have to date been unsuccessful in these basins, but the company is reportedly getting ready to use "a different prism" to explore anew. The San Julian basin close to the Atlantic Falklands archipelago and the Colorado basin up north are top alternatives for renewed exploration.

In terms of total international production, Petrobras is forecasting a 147% increase from 2007-11 to some 568,000 boe/d from 233,000boe/d. Most of the increase will come from the company's investments in the GoM and Nigeria, where output could start in 2008.

Significant production increases in South America will reportedly come after 2009 when exploration programs in Colombia are complete. The company is optimistic that the 2011 international output target could be increased further at that point.

07/14/2006