Brazil's state-run oil company, Petrobras, said on Saturday it would invest an average of $17.4 billion a year between 2007 and 2011, a 66 percent increase from its previous capital expenditure plan.
Total investment in the period rose to $87.1 billion from $56.4 billion under the 2006-2010 capital expenditure budget. Planned return on capital was raised to 16 percent from 15 percent, Petroleo Brasileiro SA said in a statement.
As a result, total oil and natural gas output at home and abroad should rise to 3.49 million barrels in oil equivalent in 2011 from 2.22 million last year and this year's target of 2.4 million barrels. In Brazil, the target is 2.93 million barrels in oil and gas in 2011.
It also announced a long-term production target for 2015 of 4.56 million barrels of oil equivalent per day.
Petrobras did not provide a breakdown for crude and gas output, but said the total output rise should allow the company, which earlier this year met Brazil's oil needs with its own production, to sell an excess 632,000 barrels per day of oil in 2011.
Under its previous plan, Petrobras expected to produce 2.3 million bpd of crude in Brazil in 2010, up from the current output of about 1.8 million bpd.
Petrobras will pour an additional $17.4 billion into new projects. It also attributed the rise in planned spending to growing costs of equipment and services due to a global oil price rally and the strengthening of the Brazilian currency, the real, against the dollar.
The company will spend $7.8 billion more due to equipment and services costs and $4.2 billion due to foreign exchange.
Exploration and production will get $40.7 billion, up from $25 billion under the previous plan. The international area will receive $12.1 billion, or 82 percent more, with the focus on the US Gulf of Mexico and West Africa.
The company will invest $17.6 billion in natural gas, including upstream production, transportation and supplies.
Petrobras expects cash generation of $86.7 billion, which should be enough to finance practically all its investments. It plans to raise $12.6 billion in the financial markets over the period, mainly to amortise debts worth $12.2 billion.
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