MercoPress. South Atlantic News Agency

Petrobras production in 2004 dropped 3,2%

Petrobras, the Brazilian government owned oil consortium admitted its oil extraction in 2004 dropped 3,2% compared to 2003.

During 2004 Petrobras' total average production of oil and liquid natural gas (LNG), and natural gas in Brazil and overseas was just over two million barrels of oil equivalent/day (boed), representing a slight decline of 0.8% compared with 2,036.500 boed in 2003.

The average annual domestic output of oil and LNG was 1,492.600 barrels per day (bpd) against 1,540.100 thousand bpd in 2003. The principal factors behind this reduction were contractual delays in the delivery of the P-43, P-48 and P-50 platforms to the new Barracuda, Caratinga and Albacora Leste fields and problems experienced in the Marlim Sul field, both of which translated into the Company being unable to offset the natural decline in production from the Marlim field.

Last December, the start-up of platform P-43 in the Barracuda field has already ensured a substantial increase in output to 1,527.900 bpd, 2.3% above the annual average. This month P-48 is scheduled to begin production with an estimated potential 300,000 bpd.

The Company also reports that in 2004, the average production at the more mature onshore fields stabilized at 250.500 bpd, a slight increase compared with 2003, when an output of 248.400 bpd was recorded.

By contrast, average Brazilian natural gas output in 2004 was 42,146.2 thousand cubic meters daily (m3d), an increase of 5.8% over production in 2003 of 39,827.3 thousand m3d.

This increase reflects the growth in the domestic market for natural gas, among the Company's strategic objectives, and the larger production of non-associated natural gas in the northern region of the country.

Petrobras' average international production of oil and LNG grew from 160.900 bpd in 2003 to 168.500 bpd, principally thanks to the normalization of Venezuelan output. The average international production of natural gas grew still more significantly to 15,995.800 m3d in 2004 from 14,443.400 m3d in 2003, once again reflecting the domestic increase in demand for natural gas, in turn boosting production in Bolivia.

In this context, the Company also began natural gas production in the Coulumb North field in the Gulf of Mexico.

Production increases in Brazil are expected for early 2005 as the start up of operations at the P-48 platform in the first quarter, accelerated output from P-43, each one with an installed production capacity of 150 thousand bpd, in the second half of 2005 the start up of the P-50 platform (Albacora Leste field), with a 180.000 bpd capacity, the recovery in production at the Marlim Sul field and, late in 2005, the start-up of platform P-34 in the Jubarte field, with a production capacity of 60 thousand bpd, will all be instrumental in the resumption in growth of the Company's total oil, LNG and natural gas output in Brazil and overseas.

Together, these additional production facilities are important steps towards achieving Petrobras' strategic target of 3.4 million boed by 2010.

Petrobras has operations overseas in Argentina, United States, Venezuela, Angola, Bolivia, Colombia, Ecuador and Peru.

Brazil's proven oil and natural gas reserves in Brazil and overseas last December 31, reached 14,890 billion boe, according to the Society of Petroleum Engineers, which represents a 2,7% increase over 2003.

However following the Securities and Exchange Commission methodology, reserves totalled 11,820 billion barrels with a 1,8% increase.