MercoPress. South Atlantic News Agency

Petrobras leases 20 drilling rigs to become operational in next two years

Sergio Gabrielli, Petrobras CEO

Brazil’s government managed oil and gas corporation Petrobras announced it leased 20 foreign drilling rigs that will start operating in the next two years as it seeks to boost its capacity to explore for and produce oil.

“We have 14 new rigs in operation now, and will have 20 more by 2012” Chief Executive Officer Sergio Gabrielli told reporters in Rio de Janeiro. The rigs are under contract for seven years.

Domestic shipyards will start delivering the first of 28 rigs to be built in Brazil by about 2014, Gabrielli said. Environmental permits have complicated the contracts to build rigs locally, he said.

But “Petrobras will meet its target to double production in the next decade as it expands its drilling fleet” Gabrielli said.

Petrobras CEO also revealed that the corporation plans to raise 40 billion US dollars in the next five years through bank loans and bond sales.

“Petrobras also needs to refinance 38 billion in debt that is due through 2014”, said Gabrielli adding that the corporation expects oil prices to average 65 a barrel to 85 US dollars a barrel through 2015, helping to finance spending.

Petrobras plans to invest 224 billion for the five years through 2014 to boost oil output and expand refining. The company will revise its investment plan next year to include the development of new oil reserves it bought from the government as part of a 70 billion share sale, the largest in history.