Brazil’s Petrobras Ramps Up Production of Pre-Salt Oil
After several years of very little progress, Brazil is finally beginning to extract oil from ultra-deep water.
Brazil’s economy grew at an astounding pace from 2005 to 2010, thanks to a commodity boom that sent exports of things like soy, beef and iron ore soaring. Brazil had already been a major oil exporter for years, but things really took off after the discovery of a massive deposit of offshore oil in 2007.
The discovery of billions of barrels of oil underneath a thick layer of salt presented significant engineering and financing challenges, but a wave of excitement swept through the country.
The extreme challenges of getting at the oil have forced Petrobras to invest billions in new equipment and advanced technology, and even still, it has run into delays.
As costs ballooned and project deadlines slipped, Petrobras racked up enormous debt, so much so that it has been called the world’s most indebted major oil company.
Now Petrobras may be turning a corner. New data shows that production from the pre-salt jumped from essentially nil to 520,000 barrels per day in July.
But the biggest problem facing Petrobras is one of engineering. The pre-salt is arguably the most challenging environment to work in for any oil company. Still, there is finally some evidence that Petrobras is making progress.
Source: oilpricecom
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