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Brazil’s pre-salt extraction costs just $8 per barrel

Staff Writer | August 16, 2017
Discovered ten years ago, Brazil’s pre-salt area has rapidly become the biggest oil-producing area in the country.
Brazil’s pre-salt
Oil exploration   The geological layers
Because pre-salt layers are the geological layers that were laid before a layer of salt was created by the Gondwana breakup about 600 to 530 million years ago they are quite costly and difficult to drill in, but hold massive potential for production.

Brazil just announced a fantastic first half, with pre-tax profits reaching $4.4 billion in 2017, a staggering increase from $395 million a year ago.

This is thanks in huge part to falling production and exploration costs, which dropped by 68%.

In June Brazilian output rose nearly a full percent from May to a daily average of 2.675 million barrels. Production in the pre-salt areas alone skyrocketed to an average of 1.353 million bpd, a growth of 6.4% from May.

In July, for the first-time output from the pre-salt wells surpassed the rest of the country’s fields combined.

Now, according to Petroleo Brasileiro chief executive officer Pedro Parente, oil is being extracted from the pre-salt offshore wells at the jaw-dropping cost of just $8 per barrel.

This is an investment opportunity that has not gone unnoticed, attracting domestic as well as foreign interests to invest heavily in exploration in the previously stagnant market.