CAPITAL: Brasilia

MONETARY UNIT: Real

REFINING CAPACITY: 1.8 million b/d

OIL PRODUCTION: 1.1 million b/d

OIL RESERVES: 7.4 billion bbl

GAS RESERVES: 7.9 tcf

Petrobras launched major initiatives to open its basins to outside explorers, strive for oil self-sufficiency, and actively exploit and market its natural gas resources while transforming itself into a multinational energy company.

The company hoped to spend $32.9 billion by 2005 to boost oil and gas production in Brazil, improve refining-marketing efficiencies, expand gas and power investments, and participate more broadly in international E&P.

Petrobras also pledged to gird itself to compete successfully with the outside companies exploring Brazil`s basins. Its partial privatization was to leave the government with no less than a 50+% stake in the substantial company.

OIL, gas projects

Petrobras resolved to invest $20 billion during 4 years to achieve oil production self-sufficiency by 2003. The goal: hiking output to 1.75 million b/d from 1.13 million b/d in 1999.

Outside operators would provide some of the resources as the country opened its oil and gas basins to equity participation for the first time in 40 years.

Brazil licensed 12 of the 27 offshore blocks offered in its first licensing round and launched a second round with 13 offshore and 12 onshore blocks, all nominated. Second round blocks were to be awarded in late 2000.

Even as Petrobras was setting the platform for 2.6 billion bbl Roncador field in the Campos basin in late 1999, it discovered a Santos basin field with reserves of at least 600-700 million bbl of 35° gravity oil.

Petrobras reported an important Amazon gas discovery along the Uatuma River 200 km northeast of Manaus. It cut 12 m of pay at 1,150 m in Permo-Carboniferous Nova Olinda sandstones on a 20 sq km prospect. Initial estimate was for 210 bcf of reserves. The find is far from existing fields.

Operators ran 17-22 rigs in the country in 1999, more than half of them offshore.

Start-up of the Bolivia-Brazil gas pipeline was the big attention-getter, but Petrobras had begun considering countrywide gas utilization seriously for the first time.

Segments were under construction along the Atlantic to connect spotty gas systems near Fortaleza, Recife, and Vitoria/Campos. The idea of linking existing pipe to forge a system that would roughly parallel the Atlantic coast from west of Manaus to Recife to Rio and Sao Paolo remained a distant dream.

Brazilian gas demand was forecast to reach 2-2.5 bcfd in 2005 from about 775 MMcfd in 1999.

Processing activity

A major initiative to modernize Brazil`s refineries and adapt them to use heavier crudes culminated in numerous projects.

For example, coking units started up at four refineries in the 1980s-90s. Two new fluid catalytic crackers were to start up during 1999 and a third in 2002.