Brazils Gas and Oil Reserves Edge Down Slightly in 2006

Brazil’s gas and oil reserves edged down slightly in 2006, the state-run oil firm Petroleo Brasileiro SA, or Petrobras, said in a release.

Petrobras said a statement Saturday that its Brazilian oil and gas reserves receded to 10.573 billion barrels of oil equivalent by Dec. 31, 2006, compared to 10.578 billion barrels a year earlier, according to the strict criteria of the U.S. Securities and Exchange Commission, or SEC.

Barrels of oil equivalent, or BOE, include petroleum, oil condensate and natural gas.

The SEC requires oil companies to have firm oil sale contracts for new fields to be considered company reserves, among other requirements.

Petrobras said its domestic production reached 705 million BOE in 2006, while the company added 700 million BOE as new domestic oil and gas reserves during the year.

Petrobras’ proven reserves abroad dropped 26 percent to 885 million BOE last year, from 1.2 billion BOE in December 2005. The company’s combined domestic and overseas reserves fell 2.7 percent to 11.458 billion BOE at the end of 2006, from 11.775 billion BOE a year earlier.

Petrobras had to cede part of its production in Venezuela to state oil firm Petroleos de Venezuela in a revision of production contracts with the Venezuelan government in early 2006. International reserves will increase when new reserves in Nigeria and Bolivia enter more advanced stages of development, Petrobras said.

At current production levels, domestic and foreign reserves will last 14.5 years, Petrobras said.

According to the less strict criteria of the Society of Petroleum Engineers, which accepts areas in earlier stages of development as reserves, Petrobras’ Brazilian reserves actually rose by 3.9 percent in 2006 to 13.753 billion BOE, from 13.232 billion BOE a year earlier.

Petrobras incorporated new discoveries into its reserves, among them the Maromba field in the Campos Basin and the Catua field in the Espirito Santo Basin off Brazil southern Atlantic coast.