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Rio De Janeiro (UPI) Jun 22, 2010 Brazil will spend $224 billion in five years on doubling its capacity for oil production and export despite cautious business optimism on the future global outlook for crude prices. State-run Petrobras oil giant unveiled the spending plans as Chief Executive Officer Sergio Gabrielli set out the company's strategy to build capacity in the run-up to 2020, when Brazil will have doubled its production to 5.4 million barrels a day from 2.7 million barrels a day at present. The London Center for Global Energy Studies said in its Monthly Oil Report Tuesday hopes of a global economic recovery had nudged the crude oil price higher. The think tank said it expects the oil price to remain volatile around a flat trend through the rest of 2010 and early next year. Analysts said Brazil's outlandish spending plans anchored Petrobas business strategy to a prevailing optimism that oil prices would remain between moderate to higher brackets in the foreseeable future and wouldn't fall so much as to discourage major investment. Skeptics in the industry believe all long-term and large investment in the oil industry remains high-risk -- unless the spender feels comfortable about unloading today's cash for tomorrow's returns irrespective of inflation and other factors. Petrobras said 95 percent of the planned outlay would be spent within Brazil, a reference to Brazil's plans to increase the company's presence in joint venture projects abroad. Brazil discovered massive offshore oil fields from 2007-09, prompting the country to revise not only oil industry spending plans but also defense expenditure to beef up military protection for the offshore fields. Petrobras expects to raise $58 billion through loans and equity sales. A planned $25 billion share offering this year would make it the biggest stock sale in the Western Hemisphere in at least a decade. Petrobras will also have a minimum 30 percent stake in any new exploration license in Brazil once new legislation recently passed by Congress takes effect. Petrobras production targets don't include output from projects the company hasn't started yet, including the Franco oil field it plans to buy from the government in July with stock. The government said May 12 it found 4.5 billion barrels of recoverable light oil at Franco, the largest discovery since Petrobras found Tupi in 2007. The corporation is also planning to raise its refining capacity to 3.2 million barrels a day by 2020 from about 1.8 million barrels a day at present.?Brazil is looking to the rest of Latin America and beyond as potential markets for crude and refined products.
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US slaps BP with new 51-million-dollar spill billWashington (AFP) June 21, 2010 The White House on Monday slapped BP with a new 51-million-dollar bill, the third sent to the British energy giant and its partners for government expenses incurred in efforts to halt the Gulf of Mexico oil spill. Officials have stressed that they would keep billing the British energy giant for all associated costs from America's biggest-ever environmental disaster, under a US law requiring ... read more |
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