Petrobras eyes 1 million bpd from sub-salt wells

By Denise Luna

RIO DE JANEIRO, July 24 (Reuters) - Brazilian energy giant Petrobras (PETR4.SA) plans to install two production units every two years from 2010 to pump oil from sub-salt reserves in the off-shore Santos basin, an official from the firm said on Thursday.

Assistant director for Exploration and Production, Alvaro Costa, estimated future production of 1 million barrels per day from the sub-salt layers of the Tupi field.

"We're going to have 11 vessels producing in Tupi in the future, more or less 1 million barrels with Tupi alone," he said.

The field will also provide around 220 cubic meters of gas for each cubic meter of oil extracted, Costa said.

Petrobras has chosen Tupi to be the first of its sub-salt resources that it will develop beginning with long-term tests from March 2009 when it will turn out 30,000 barrels a day.

The Campos basin, which neighbours the Santos basin, supplies around 80 percent of national oil output of around 1.8 million barrels per day.

Tupi is the only field in the sub-salt zone with known reserves of between 5 and 8 billion barrels of oil equivalent (oil and gas), compared with Brazil's proven reserves of around 14 billion barrels.

Costa said technological advances were reducing the time and money the firm was spending exploring sub-salt resources.

"The expensive thing with the well is the probing time. We've had a reduction from six to two months, which is a reduction of the cost of the exploratory well to one third," Costa said.

Hire costs for probing equipment can reach $600,000 per day, Costa said.

The sub-salt reserves extend over an 800-kilometer (500-mile) stretch and may contain enough oil to propel Brazil to the status of a major world oil producer. (Translated by Peter Murphy; Editing by Marguerita Choy)