In the Headlines
El Paso to invest US $90MM in E&P in 2006
Business News Americas – April 3, 2006
US energy company El Paso (NYSE: EP) plans to invest US$90MM to
develop its oil and gas portfolio in Brazil this year, up from US$50mn-60mn
in 2005, company Brazil E&P vice-president Mike Hoffman announced
during the Latin Upstream seminar in Rio de Janeiro on Friday.
El Paso plans to drill seven exploration wells in 2006 in five
of the 15 exploration concessions in which it has interests in the
country, Hoffman said.
The company will also drill two wells to develop production further
at the Pescada and Arabiana fields in the Camamu Almada basin in
Part of the investment will go to start production at the Pinaúna
gas field in the northeastern region by the fourth quarter of 2007,
Of the total US$90mn planned investment, the company will spend
45% on exploration, 27% on production and 20% on development.
"Our portfolio gives us a pretty solid position in Brazil,"
he said. "Our aim is to double production contribution in the
next three years."
The company currently produces 35,000 barrels of oil a day from
its stakes in the Pescada and Arabiana fields operated by Brazil's
federal energy company Petrobras (NYSE: PBR).
The announcement comes as the company concludes a worldwide restructuring
of its assets through the sale of power businesses in most countries
where El Paso operates.
"El Paso is a new company," Hoffman said. "We are
getting to the point where we have consolidated a lot of our debt."
El Paso sold control of its 928MW Macaé gas-fired power
plant to Petrobras last year and its 470MW Araucária to local
power firm Copel in March. Although El Paso still controls six power
plants in the country's northern region and has interests in three
pipeline projects, the company will now focus on oil and gas in
El Paso has concessions covering 430,000 acres in Brazil, which
could be expanded in November if it bids for new exploration concessions
the government plans to offer in the eighth exploration licensing
"We will look at the blocks on offer and decide whether to
bid," said Hoffman.
El Paso currently has interests in two production fields, five
development blocks and eight exploration blocks.
Total reserves in the country are estimated at 209 million barrels
of oil equivalent (Mboe), of which 42Mboe are proven reserves, Hoffman