Petrobras says pre-salt not threatened by oil plunge

Bnamericas Published: Wednesday, January 07, 2015

Brazil's state-run oil firm Petrobras says pre-salt hydrocarbon development is viable with crude prices as low as US$45/b.

In a statement, the company denied its investment program is threatened by a sharp decline in global oil values.

"The breakeven point, or the lowest price at which production is economically viable, is around US$45/b, including taxes but not considering expenses like the transport of gas," Petrobras said.

"When considering those factors, the [breakeven] value could increase by US$5 to US$7 per barrel."

The comments come as Brent crude fell below US$50/b on Wednesday, its lowest level since May 2009.

Analysts blame the decline on higher US shale production and weak global demand.

Nestled under a 2km carbonate crust below the Atlantic seabed, Brazil's pre-salt belt holds estimated reserves of more than 35Bboe.

Petrobras has targeted accumulated investments of US$102bn by 2018 in the pre-salt area alone.

In addition to oil price concerns, the company has been hit by a corruption scandal that has sparked a federal police probe dubbed Operation Car Wash.

The allegations triggered a 41% fall in Petrobras' shares last year, wiping US$41bn off its market value.

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