MercoPress. South Atlantic News Agency

Brazil closer to achieving oil self production.

In spite of some delays in the construction by US contractors of oil rigs, Brazil government owned oil company Petrobras expects to reach a record production of 1,74 million barrels per day in the coming quarter, according to industry sources.

"We expect to finish 2005 with a daily production above 1,8 million bpd and with an annual average of 1,78 million bpd" said Guilherme Estrella Petrobras head of Production and Exploration.

If this proves true, Brazil will have reached almost self sufficiency regarding oil, a self imposed target when the company was founded six decades ago.

Brazil imports 10% of its domestic oil consumption which is estimated in 1,85 million bpd, mainly from Venezuela, Argentina and the Middle East.

"Petrobras has solid structural foundations to ensure a continued production growth and probably self-sufficiency by 2006", indicated Mr. Estrella.

Once Petrobras receives four rigs currently under construction in the United States, the company will be positioned to increase daily production by half a million bpd towards the end of 2005.

Apparently the delivery of two rigs, "Barracuda" and "Caratinga" which are being built by Kellogg Brown Root is considerably delayed which could force Brazil to increase purchases in the international oil market.

However Mr. Estrella argued that delays in the building of sophisticated oil rigs can be expected and in this particular case the delay "is in average parameters".

The Brazilian press claims "Barracuda" should have been delivered at the end of last year and has now been rescheduled for next November. "Cataringa" will also be several months behind schedule when it's delivered next January.