Pacific Rubiales looking at possible Brazilian bid - Regional

Published: Monday, November 2, 2009 15:26 (GMT -0400)

By Christopher Lenton / Business News Americas

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Toronto-based Pacific Rubiales (TSX: PRE) has its eyes on Brazil and could bid in an upcoming round for new onshore acreage, company president Jose Francisco Arata said in a conference call with analysts and investors.

"We will see what Brazil is going to offer in the onshore round, and then we will rank it among all the exploration blocks we have. If there is interest, then we will have a look," Arata said.

"So far we haven't entered Brazil because the environment in Brazil is not as competitive as what we see in Colombia and Peru," he continued.

Arata said the company would also look to bid at the upcoming open round in Colombia.

"There are blocks in key areas where we are actively exploring in the Llanos basin and the Lower Magdalena basin. We are going to buy the data and do all the analysis," Arata said. "If we see that there are strategic blocks that fit with our current projects, we will participate."

The company will have enough cash flow in 2011 to finance any blocks awarded in the Colombian round.

"The commitments if you win a block won't start until 2011," Arata said. "By the year 2011, we will have enough free cash flow and free Ebitda that we can finance any block that we might win."

Pacific Rubiales is planning to more than double capex spending in 2010 to US$853mn. The company aims to double its net production from the current estimate for end-2009 of 46,000boe/d to 92,000boe/d at the end of next year.

Brazilian hydrocarbons regulator ANP is expecting to launch the highly anticipated round 11 for new oil blocks in April or May of next year, ANP director Nelson Narciso said in October.

New areas in Brazil's prolific pre-salt areas will not be included in the round, as the country is currently changing the concession framework for blocks in the area.

Colombian hydrocarbons regulator ANH pre-launched the country's open round on October 15. The full launch will take place at an ANH-sponsored investment conference in Bogotá on December 2.

The nearly 170 blocks, located both on and offshore, have been divided into three groups based on the production potential and amount of existing information available on each area. Each group will have different investment and prequalification requirements.

Road shows will be held through May, 2010, and offers will be received and opened on June 21.

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