Petrobras says Brazil oil output up 0.7 pct in May

RIO DE JANEIRO, June 19 (Reuters) - Brazil's state-run oil company Petrobras (PETR4.SA)(PBR.N) said late Thursday domestic oil production rose 0.7 percent in May to 1.99 million barrels per day from 1.98 million bpd in April.

The slight increase puts the company's domestic oil output near previous record levels as it begins pumping crude from reserves buried beneath a layer of salt miles below the surface of the ocean off the Brazilian coast.

"This 14,000-bpd difference derived mainly from wells going on stream at platforms P-50 (Albacora Leste) and P-53 (Marlim Leste) and from the increased production of the wells connected to FPSO-Cidade de Niteroi (Marlim Leste)," Petrobras said in a statement.

Production outside Brazil rose by 2,000 bpd to 136,300 bpd from the previous month, taking Petrobras' total production in May, including natural gas liquids, to 2.13 million bpd.

Output reached a new high in March, just above May levels, thanks to new wells that came online. A union strike that forced concessions in pay and working conditions did not affect output, according to the company.

Petrobras in May began its first production at the massive offshore Tupi field that contains some 8 billion barrels of oil.

It plans to invest $174 billion though 2013 as part of broad plan including development of Tupi and other subsalt discoveries from the little-explored Santos Basin, south of the Campos Basin where most of Brazil's oil is currently pumped. (Reporting by Brian Ellsworth; Editing by John Picinich)