Brazil’s production of oil and natural gas in December 2010 surpassed the previous one-month record, according to a release from the ANP regulatory agency. December 2010 oil output of 2.18 million barrels per day represents a 4.4% increase over November and was 9.1% higher than in December 2009.
Production of natural gas averaged 69 million cubic meters per day in the last month of 2010, up 4.5% from the previous month and 14.5% from December 2009, ANP said. Offshore fields accounted for 91.4% of December’s crude oil output and 75.7% of the natural gas.
Nearly 93% of oil and gas production came from fields operated by state-controlled giant Petrobras. Only two of Brazil’s 20 biggest oil and gas fields by output are operated by foreign-owned firms.
Earlier in the month Petrobras said the company’s proven oil and gas reserves rose to approximately 16 billion barrels of oil equivalent in 2010, up 7.5% from the previous year, the company said.
Of those reserves, 15.3 billion barrels are located in Brazil and 703 million barrels overseas. Petrobras said that estimates were done using Society of Petroleum Engineers guidelines. Under stricter U.S. Securities and Exchange Commission criteria, Petrobras’ reserves climbed 5% to 12.7 billion barrels.
The increase from 14.9 billion barrels in 2009 was due to the incorporation of new reserves from pre-salt areas in the Campos Basin, as well as discoveries made at other deposits Petrobras is developing in Brazil and abroad, the statement added.
The pre-salt area is a massive, recently discovered frontier that measures 800 kilometres long and 200 kilometres wide and is estimated to hold some 80 billion barrels of crude.
But accessing those fields will be very costly and pose an enormous technical challenge because they are located some 150 kilometres offshore at depths of between 5,000-7,000 meters and under a layer of salt up to 2 kilometres thick. Drastic changes in temperature as the oil is brought to the surface add to the technical complexity of developing those fields.
A law signed late last year declares the pre-salt reserves to be state property and stipulates that they will be explored and developed by consortiums in which Petrobras will have a minimum 30% stake. Furthermore Petrobras will be the operator of all projects and can be awarded exploration contracts without a competitive bidding process.
The Brazilian government owns more than 50 percent of the voting rights in Petrobras, an open capital company whose shares trade on the Sao Paulo, New York, Madrid and Buenos Aires stock exchanges. Petrobras became the second largest company in the Americas by market capitalization after a 66.9 billion USD share sale in September, the biggest in history.