CORRECTED - UPDATE 2-Brazil Iracema oil well flow rates strong

* Brazil well test shows strong potential of subsalt area

* Company announced 50,000 bpd flow rate in Iracema

* Results a positive sign for subsalt projects (Corrects to remove reference to Iara field)

RIO DE JANEIRO, Nov 19 (Reuters) - Strong flow rates in a Petrobras oil well in Brazil’s offshore subsalt area suggest the region’s fields may have high productivity rates that could help control costs of the logistically complex production.

High flow rates would let companies produce those fields with fewer than expected total wells -- which cost more than a hundred million dollars each -- possibly boosting the appeal of an area that has become a new petroleum exploration frontier.

“These flow rates are very, very positive because it will mean the companies can reduce the number of wells they have to drill to the produce the fields,” said Ruaraidh Montgomery, Latin America Upstream Analyst for Wood Mackenzie.

“The big cost for these fields is the wells, because you have to drill deep, so the signs are very positive,” he said, though he added flow rates may be different in other parts of the same reservoir.

Petrobras PETR4.SAPBR.N said on Wednesday the Iracema well could have initial production rates of 50,000 (bpd) barrels per day after announcing similar flow rates earlier this year in the nearby Guara field.

Petrobras Finance Director Almir Barbassa said in a telephone interview the company could further reduce the number of wells for the area given the new flow data.

“It could be that we will need fewer (wells), that will depend on a lot of tests that still have to be done,” Barbassa said.

Earlier this year the company cut the projected number of wells necessary to produce 120,000 bpd in the subsalt region to 12 from 20, citing high well productivity.

Iracema is in the same concession block as the giant Tupi field, the largest find of Brazil’s subsalt region with an estimated 5 billion to 8 billion barrels of oil that spurred investor interest when it was announced in 2007.

For more details on Brazil’s subsalt discoveries, please click on [ID:N19167408].

The ultra-deep water production requires pumping oil from deep beneath the ocean floor at depths of as much as 7,000 meters (23,000 feet) below sea level, creating concerns about the cost of bringing the oil to surface and the risk of drilling dry holes.

Petrobras said in a press release two tests showed Iracema, located in the BM-S-11 block, had initial flow rates of 5,500 barrels per of light oil.

“The well’s initial production is being estimated at up to 50,000 barrels of oil per day, proving the Tupi area’s high light oil production capacity,” the company said.

Petrobras is currently producing 15,000 bpd in an extended well test in Tupi.

“The productivity is the key part that people miss out on, it doesn’t matter how expensive it is to drill the well if you’ve got expensive oil flowing out of it,” said one expert who asked not to be identified. (Editing by Christian Wiessner)