Sao Paulo – A subsidiary of state-owned China National Petroleum Corporation has begun talks on developing deposits in an oil-rich region off the coast of the Brazilian state of Sao Paulo, the media reported Wednesday.
The vice president of CNPC Manufacturing, Zhang Hanliang, met Tuesday with Sao Paulo Gov. Geraldo Alckmin to discuss rules and guidelines for the Chinese investment, although the amount of the planned outlay was not revealed.
"China has a clear interest in the oil of the Santos basin. We already have some partners who will help (meet requirements on the proportion of domestically produced) parts and equipment to make production in Brazil viable," Zhang said in statements published by Folha de Sao Paulo's online edition.
The Santos basin is part of the recently discovered, ultra-deep pre-salt region, so-named because it is located at depths of between 5,000-7,000 meters (16,400-22,950 feet) and under a layer of salt up to 2 kilometers (1.2 miles) thick.
The pre-salt region is a vast area 800 kilometers (500 miles) long and 200 kilometers (125 miles) wide that encompasses the Santos, Campos and Espirito Santo basins and is estimated to hold as much as 80 billion barrels of crude.
The pre-salt reserves' share of national oil production is expected to climb from 2 percent in 2011 to 40.5 percent in 2020.
CNPC Manufacturing is a partner in the Bomcobras consortium along with Brazilian firms Asperbras and Brasil China Petroleo and China's Baoji Oilfield Machinery.
The consortium announced this week that it plans to invest 130 million reais ($74 million) to build a factory in the northeastern state of Bahia that will manufacture probes, pumps, drilling pipes and towers, cranes and other oil-drilling equipment.
The plant will employ 200 people and is slated to enter into operation in the second half of 2012.
A preliminary agreement for the training of qualified personnel was reached during an initial meeting between the consortium and the state government.