MercoPress. South Atlantic News Agency

Brazil oil self sufficient by end of 2005

Brazilian authorities are confident the country will reach oil production self-sufficiency a year ahead of target. Government owned hydrocarbons complex Petrobras hopes to produce 1,85 million barrels of crude per day by the end of 2005, enough to cover domestic demand, year ahead of schedule.

"Officially, we'll reach self-sufficiency in 2006, but we're committed to having that happen by the end of next year" said Petrobras' Exploration and Production Director Guilherme Estrella in an interview with O Estado de Sao Paulo, one of the country's most respected newspapers.

By the end of this year Petrobras expects to be pumping 1.25 million bpd, which is equivalent to the 2003 production volume, said Mr. Estrella who admitted that "technical problems" had forced a reduction in oil production in several areas.

However the situation should be over by September when the first of three large offshore production platforms will begin operating in the rich Campos basin in the Atlantic Ocean off the coast of Rio de Janeiro state which currently accounts for 80% of the company's output.

With the three new oil rigs Petrobras expects a substancial boost to production in the coming 18 months, well above the 2003 and 2004 volumes. Petrobras' strategy has been designed to take advantage of high international crude prices and increase its negotiating leverage with other oil companies, explained Mr. Estrella.

Over the past decade Brazil with Petrobrás has implemented an aggressive exploration and production program reducing the country's dependence on foreign oil to 10% of demand of demand compared to 80% twenty years ago.

However analysts predict that even if Brazil reaches self sufficiency it will continue to import light crude for its main refineries which were designed to run on Persian Gulf-grade crude. To compensate Petrobras plans to begin exporting some 500,000 bpd of lower-grade crude in the medium term.