Petrobras Sees Stable Oil Demand and Prices

Tag : fuel oil

Petrobras foresees no cooling in demand for oil products in Braziland no price cuts in the local gasoline and diesel market despitetumbling world oil prices, financial director Alimir Barbassa saidon Thursday.
"When oil was rising higher and higher, the dollar was weakening,and now that is being compensated by a move in the otherdirection," he told Reuters in an interview, saying that thestronger dollar would offset the lower price of oil.
Petrobras is partially cushioned from fluctuations in world oilprices as it gets about half its revenues from fuel sales on thedomestic market.
The price of crude has dropped by more than half from its recordhigh of $147 in July and is now about $65 a barrel.
The firm's fortunes were boosted last year with the discovery ofhuge oil reserves beneath a thick layer of salt below the oceanfloor which analysts say could contain 50-80bn barrels of oil.
Extracting the 7km (4.5 mile) deep oil will require investments ofhundreds of billions of dollars - cash that will now be harder tofind as banks and investors prefer to keep their cash firmly inhand.
Barbassa said he was confident in the viability of the subsaltreserves despite the capital required to access them because oilsupplies would tighten in the coming years as existing wells rundry.
"Costs have risen throughout the industry, which will mean asmaller supply in the future, so from that point of view, lookingat subsalt, there's nothing to worry about," he said.
The director said that the company's earnings would be unaffectedby the fall in oil prices because sales on the local market were inthe local currency, the real.
A researcher at the governmental Energy Research Company (EPE) saidlast month that exploiting the subsalt oil would still befinancially worthwhile with crude prices less than $70 per barrel.
By Denise Luna and Peter Murphy, Reuters .