Petrobras May Increase E&P Spending

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Petrobras, Brazil's state-controlled oil company, may boost exploration and production investments in its 2011-2015 business plan, Reuters reported, citing two sources close to the company. The plan is expected to be the same size as the 2010-2014 plan.

When Petrobras (PBR) unveiled a $224 billion budget for 2010-2014 last year, the spending plan immediately became easily the largest among the world's major integrated oil companies, but also gave investors pause over the company's methods for raising to fund such an ambitious budget.

Earlier this month, Petrobras raised its 10-year oil production target to 6 million barrels per day, well above the 5.4 million barrels per day the company was hoping to produce by 2020. Petrobras currently produces an average of 2.6 million barrels per day.

The company is relying on the pre-salt fields off the coast of southeastern Brazil to help its home country become one of the dominant non-OPEC producers in the world. Petrobras says the Lula field may hold 6.5 billion barrels of recoverable reserves while the nearby Libra field may have 5 billion barrels of recoverable reserves.