Petrobras Says Chevron Oil Spill May Dampen Its Output

June 25, 2012
The Brazil energy giant holds a 30% stake in the Chevron-operated Frade field, site of oil spills in March and last November.

Brazil's state-owned energy giant Petrobras (IW 1000/19) said Monday it will produce 2.02 million barrels of oil equivalent per day (boe/d) this year, somewhat less than last year, because of the spill at a field run by U.S. firm Chevron (IW 500/2).

Production "will remain in value around the 2011 production with [a variation] of more or less 2%," Jose Miranda Formigli, head of Petrobras exploration and production, told a press conference.

"This year there is uncertainty as to a resumption of production at the [Chevron-operated] Frade field," that leaked some 2,400 barrels in November, he added.

In March, an oil spill was detected at a depth of 1,300 meters (4,200 feet) in the Frade field, in which Petrobras has a 30% stake, not far from the site of the bigger spill that occurred in November.

State prosecutors have filed legal action against Chevron and the oil-drilling contractor Transocean over the November incident, seeking $11 billion for what they have called "immeasurable" environmental damage.

Police and prosecutors have concluded that the Frade spill was caused by an error on Chevron's part.

The U.S. oil giant, which has suspended its drilling activities in Brazil since March, has denied the charges as "outrageous and without merit" and has vowed to challenge them in court.

Oil and natural gas production in Brazil last year reached an average daily record of 2.02 million boe/d, 1% higher than in 2010 but below the target set by Petrobras, which hoped to reach 2.1 million.

Two weeks ago, Petrobras announced a huge investment plan of $236.5 billion for the 2012-2016 period, including 60% earmarked for exploration and production in the sub-salt offshore oil reserves, which could turn Brazil into one of the world's top crude oil exporters.

In two to three years, Brazil hopes, with the sub-salt oil, to double its current reserves of 15.7 billion barrels, and raised its domestic and external production in 2016 from the current 2.5 million boe/d to 3.3 million.

In 2010, Petrobras was the world's third biggest oil company with a market value of $228 billion, according to market data published by the Brazilian newspaper O Globo.

Copyright Agence France-Presse, 2012

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