Posted on October 21, 2015 by Grace Montealegre
Brazil's subsalt polygon, an offshore area that was once forecasted to yield undiscovered petroleum and gas to supply the world's current oil needs for more than five years, will only break even this year with oil worth $55 a barrel or more, Oswaldo Pedrosa, chief executive of state-owned oil-asset management company Pre-Sal Petroleo SA (PPSA) said this week.
Pedrosa said the break-even estimate also applies to Libra, the 8 billion to 12 billion barrel prospect being developed by Petrobras, Royal Dutch Shell, Total, China's state-owned CNOOC and China National Petroleum Co. If costs in the subsalt are that high, Petrobras, the world's most-indebted major oil company, faces serious strains on its already stretched finances. Some of its most important and highest producing fields may be operating at a loss.
Pedrosa, who will manage the government's share of output from Libra and other new developments in the subsalt, is putting his hopes in a recovery in oil prices by the end of the decade, when Libra is expected to start producing. The subsalt is an offshore region where oil and gas are trapped far beneath the seabed by a layer of mineral salts. The subsalt polygon, a region where Pedrosa's company has authority over new development, contains at least 176 billion barrels of undiscovered recoverable resources, according to Rio de Janeiro State University.
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