By Jeff Fick
RIO DE JANEIRO--The group of oil companies exploring Brazil's
largest offshore discovery will spend between $400 million and $500
million on the field in 2014, consortium leader Petroleo Brasileiro
SA, or Petrobras, said late Thursday.
Petrobras heads the group of companies that will develop Libra,
a field that is estimated to hold between 8 billion and 12 billion
barrels of recoverable oil buried beneath a thick layer of salt
under the Atlantic Ocean seabed. The consortium, which paid about
$7 billion for rights to the field at an auction last October, also
includes France's Total SA, Royal Dutch Shell, Cnooc Ltd. and China
National Petroleum Corp.
The group will reprocess seismic data of the area containing the
field, drill two wells and evaluate whether to hire a firm to do a
new seismic survey of the area, Petrobras said. Drilling will start
in the second half of 2014 and is expected to be concluded by
mid-2015, the company added.
A well test is also planned for the end of 2016.
The companies have four years to carry out the exploration
program, Petrobras said. Development of the field is expected to
cost $174 billion over the 35-year life of the concession
contract.
Libra is part of a series of large crude-oil deposits discovered
off Brazil's southeast coast. Brazil's government wants to use
development of the fields to spark a homegrown services industry
supporting the oil and natural gas sector. Royalties, meanwhile,
will be earmarked for funds that will invest in education, health
care and social welfare projects.
Brazil's government expects the field to generate more than $400
billion in revenues from royalties and taxes over the next 35
years.
Write to Jeff Fick at jeff.fick@wsj.com
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