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Friday, March 19, 2010

Brazil Petrobras CFO: 2010-14 Plan Targets Between $200 Billion-$220 Billion

By Jeff Fick

Dow Jones Newswires

RIO DE JANEIRO -(Dow Jones)- Brazilian state-run energy giant Petroleo Brasileiro (PBR, PETR4.BR) expects its 2010-2014 strategic investment plan to run between $200 billion and $220 billion, Chief Financial Officer Almir Barbassa said late Friday.

The final figure will be determined after the government completes an overhaul of Brazil's regulatory framework covering the oil and natural gas industry, which is currently under debate in Congress, Barbassa said.

Part of Petrobras's investments will be included in the government's second Accelerated Growth Program, or PAC 2. The program includes large-scale public works and infrastructure projects aimed at stimulating economic activity.

Petrobras expects about 264.8 billion Brazilian reals ($147 billion) to be included in PAC 2, Barbassa said.

For 2010, Petrobras expects to invest BRL88.5 billion. That would follow record investments of BRL70.8 billion in 2009.

About 36% of Petrobras' 2010 investment budget will be focused on exploration and production, especially in the key offshore subsalt deposits.

The largest of the discovered deposits sit in the Santos Basin, which is off the coast of Rio de Janeiro and Sao Paulo states. Development of the reserves is expected to be pricey and complicated, with the reservoirs under 2,000 meters of water and a further 5,000 meters below sand, rocks and salt.

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