Investors undeterred by high costs and technical hurdles

Output from Brazil's deep-water oilfields is set to continue to rise over the next five years, despite huge increases in development costs and considerable technical hurdles reports Robert Olson

THE BREAKNECK pace of the development of the country's offshore oil resources shows few signs of slowing down, despite surging costs and daunting technical problems. Petrobras, Brazil's state-controlled oil company, has not stepped back from its ambitious target of raising its Brazilian crude production from 1.637m barrels a day (b/d) to 2.3m b/d by 2010. However, maintaining this pace of development forced the company to announce a 63% increase in its upstream budget in late August, as it tried to get to grips with soaring prices for steel, cement, drilling rigs and offshore services. Petrobras has been hit on both sides of its cost equations, with global industry price increases inflating