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06/26/2009 09h16

Vale increases expenditure in exploration and is interested in pre-salt

Valor Econômico

By increasing its investments in the exploration of gas, with another partnership with Petrobras, Vale intends to go on with the strategy of diversifying its energetic sources. Yesterday, the two companies executed a heads of agreement in which Vale undertakes 25% of participation in three concessions withheld by the state-owned company in the BM-ES-22 block, in basin of Espírito Santo. Operations like that are known, in the sector, as "farm-in".

If the Brazilian National Oil Agency (ANP) approves the partnership in the BM-ES-22, Vale will become the owner of 29 exploratory concessions in Brazil. 25 of which in partnership with Petrobras. The mining company stared in the oil and gas sector in 2007, when it took part in the 9th Bidding Round of the ANP, acquiring nine areas. The subsequent acquisitions were made through the "farm-in" model. Vale still has partnerships with Shell, Devon, Ecopetrol, Eni, BG, Repsol, Woodside and Maersk. Agnelli admitted the interest for the pre-salt layer, but he commented he sees "as a curious person" a possible participation in areas of exploration in those fields. He considered it is necessary to wait for the new regulations.

The CEO of Vale, Roger Agnelli, justified the interest in the exploration of gas explaining the company has potential to consume 6 million cubic meters of the input a day, equivalent to 13.3% of the current Brazilian consumption, but this consumption is currently of only 2 million a day. With a greater availability of the input, Vale can increase the use of gas, introducing it in the operation of its locomotives, to perform the "reduction" of ore in pelletizing projects and in the generation of electric energy. The investment of Vale budgeted to explore gas was of US$ 60 million in 2008 and it may get to US$ 260 million this year, according to Agnelli, but he expects a reduction of the costs. "What will come next will depend on the studies and results", recalled the executive.