Petrobras to update investment plan

Mar 19, 2008 01:00 AM

Brazil's federal energy company Petrobras will update its 2008-12 investment plan early in the second half of 2008 to reflect Santos basin investments and the US financial crisis.
"Our investment plans will not be affected by the crisis, but our capacity to tap markets for financing could be affected," Petrobras president José Sergio Gabrielli told. In addition, costs will rise as Petrobras develops the Tupi and Jupiter discoveries in the Santos' pre-salt area and the global oil industry suffers from increased operating costs.

Petrobras's current investment plan calls for investing $ 112 bn in 2008-12. Of the $ 112 bn total, $ 104 bn will come from the company's own cash and the rest from new debt, Petrobras said last year when it announced the investment plan.
Meanwhile, high oil prices are squeezing Petrobras margins as the company imports crude to feed its refineries in Brazil. The high prices on international markets reflect the subprime crisis as money is migrating to the oil futures market, Gabrielli said.

"We are seeing a simple search for yield movement and non-commercial contracts in the futures market are increasing. These contracts do not mean that they will all be physically sold," the executive said.
West Texas Intermediate prices, for example, of late have been hovering around an all-time high of $ 110/bbl.

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