Petrobras Energia considers upping exploration spending

Argentine energy company Petrobras Energia is considering increasing its 2004 exploration budget due to the improved economy and external macroeconomic conditions, newspaper Cronista quoted CEO Alberto Guimaraes as saying in an interview. The company had planned to invest about US$120mn in exploration in Argentina in 2004, Guimaraes said, without saying how much more might be invested. "The situation in Argentina is better. I am convinced the worst is over and that the economy is growing and showing that confidence is very high," Guimaraes said. "Clearly, no one comes out of a crisis like the one this country has been through overnight, but we are on the right track," he added. On October 31, Petrobras Energia became the first Argentine company since the devaluation of the peso in early 2002 to issue bonds on the international market. The company issued US$100mn in 10-year bonds at 9.5% interest, placing 35% of the bonds with local pension funds and the remainder with US institutional investors. "The issue was very important and it is also one of the reasons why we are revising our investments," Guimaraes said. Petrobras Energia plans to invest US$80mn in refining in 2004 and another US$60mn to convert the company's service stations from the EG3 brand to Petrobras. The company also plans to invest US$10mn in its Campana petrochemicals complex to build an ammonia fertilizer gas-fired plant that should start operations from March-April 2005. Petrobras Energia is owned by Brazilian state energy company Petrobras, which plans to double its production outside of Brazil to 500,000 barrels a day by 2008.