Brazil's biggest oil field, Libra, will cost 80 billion dollars to develop, according to a senior executive with France's Total, one of five consortium members participating in the project. Total's vice president of exploration and production for the Americas, Ladislas Paszkiewicz, made the estimate at the Rio Oil & Gas conference, which began Monday and runs through Thursday.
Libra, the first of Brazil's pre-salt fields to have been auctioned off, holds reserves estimated at between 8-12 billion barrels of recoverable crude, according to official calculations.
Exploration rights to the field were awarded last year to a consortium made up of Brazilian state-controlled Petrobras, which has a 40% stake; Royal Dutch Shell, 20%; Total, 20%; and China's CNPC and CNOOC, each of which has a 10% stake.
The consortium, the sole bidder in last October's auction, paid a 15-billion-reais (roughly 6.9bn dollars) signing bonus to the Brazilian treasury after obtaining the rights to the field for 35 years.
Under the contract terms, the companies will pay royalties and also deliver 41.65% of profit oil, (oil produced after subtracting out production costs) to the Brazilian government.
Despite the high costs of the project, Paszkiewicz said he expects Libra will deliver a return on the companies' investment for many decades.
The pre-salt region is so-named because its reserves are located under water, rocks and a shifting layer of salt at depths of up to 7,000 meters below the surface of the Atlantic.
That offshore region, the main focus of investment by Petrobras, could vastly increase Brazil's proved reserves and turn the country into a major crude exporter. The pre-salt area is governed by a special regulatory regime that allows only for production-sharing contracts, not outright concessions.