Record Production for Petrobras

By Jaylan Boyle, Contributing Reporter

RIO DE JANEIRO – Brazilian government-managed oil giant Petrobras reported in a recent press release record production levels for the month of September. Domestic output increased by 1.2 percent in August. The record figures translate to two million barrels per day, compared to the previous record of 1.98 million barrels per day.

Significant factors contributing to the record figures were the completion of maintenance on the P-19 floating platform, increased production from wells in the Marlim Sul and Caratinga fields, as well as the Cidade de São Vicente coming back online. The press release also confirmed that production has begun at the Piranema field off the north coast of Brazil.

Figures from non-domestic Petrobras facilities were also encouraging for shareholders; output outside Brazil rose from 146,900 barrels per day in August to 149,300 barrels per day in September. Total Petrobras output, including liquefied natural gas, reached 2.15 million barrels per day.

Those following the petroleum sector recently have seen seen only news of the spectacular rise of Petrobras from minor player to heavyweight oil producer. The company, according to a survey recently conducted by accounting giants Ernst and Young, is now the eighth largest in the world by market value. However, what has really caught the attention of the oil-producing community has been the discovery of the potentially massive reserves in the pre-salt Tupi fields. Petrobras is expected to begin initial drilling in the region next month and will divert resources such as floating platforms away from current locations for the task.

The company is also enjoying a popular public profile. According to the Petrobras website, the aptly named Reputation Institute, a private advisory and research company headquartered in New York, found Petrobras to be the world’s fourth ‘most reputable’ company. Esteem, reliability, respect and admiration were the criteria measured in determining this result, which saw Petrobras rocket up the rankings from 20th, and placed highest among energy companies.

However, perhaps the recently-released statistics should be put in some sort of perspective. Brazil as an oil-producing nation ranks 15th behind Nigeria according to the CIA World Factbook website. Although the figures are from 2007, the recently reported increases would not move Brazil ahead in this area. And when set against the Russian production figures, which in 2007 were approaching 10 million barrels per day, the observer gets a real sense of the role Brazil still plays in the world’s oil market.

It is potential that is key to understanding why Petrobras’ market value (the value at which a company would be sold for on an open market) has leapt from 17th to eighth since April of this year. The discovery of the new fields means that Petrobras’ assets have rocketed upward in value.