Petrobras first tests in the Franco sub-salt field confirm 50,000 bpd

Jul 13, 2010 02:00 AM

Brazil's oil regulator ANP said it concluded its first test at the Franco offshore field, which holds the oil reserves that the government may sell state-controlled Petroleo Brasileiro, Petrobras, in exchange for new stock.
The field holds an estimated 4.5 bn barrels of recoverable oil according to Brazil's oil regulator

The first test at the 2-ANP-1-RJS well indicates that it may have the potential to produce about 50,000 barrels of light oil a day ANP said.
The ANP said on May 12 that Franco holds an estimated 4.5 bn barrels of recoverable oil, making it the second-largest oil find in Brazil after Tupi was discovered by Petrobras.

Brazil's ANP is exploring Franco as part of a plan to sell Petrobras the rights to as much as 5 bn barrels of reserves in an area known as the pre-salt region. The company is waiting for the government to value the oil reserves before moving ahead with a planned share offering.
The ANP is also drilling the Libra well near Franco. Both are in deep waters of the Santos Basin. Tupi was the largest oil discovery in the Americas since Mexico found Cantarell in 1976.

Petrobras also announced the board approved allowing minority investors to use Treasury bonds as payment for new shares in a planned $ 25 bn offering. Details on what types of debt can be used to buy stock will be released at "the right time", Petrobras said in a regulatory filing.
The corporation said it is giving minority shareholders the same "treatment" as the government.

Brazil's government, which owns 56 % of the company's voting stock, plans to buy shares with bonds. As part of the transaction, Petrobras will then sell the bonds back to the government in exchange for as much as 5 bn barrels of deepwater oil reserves.
Petrobras is issuing new shares to help finance $ 224 bn in investments through 2014 to boost oil production and expand its refining capacity.

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