Brazil’s Petrobras said Wednesday its pre-salt projects will continue to be viable even if global oil prices drop to $45 per barrel.
“The breakeven point, or the lowest price at which production is economically viable, is around $45/b, including taxes but not considering expenses like the transport of gas,” Petrobras said.
The state owned company said when expenses are included the break even price increases to between $50 to $52 per barrel.
Brent crude prices closed at $51.35 Wednesday, a five and a half year low.
Brazil’s offshore pre-salt play holds estimated reserves of over 35 billion barrels of oil equivalent.
Petrobras plans to invest about $102 billion in pre-salt projects by 2018.
The announcement comes on the heels of a new credit accord that will allow Petorbras to avoid default and release its long delayed third quarter results.
The company, already the most indebted oil producer in the world, has seen its stock fall by about 40 percent in the last year as investors question the company’s financial health amid a multi-billion corruption scandal.
Analysts have warned the fallout from the scandal could negatively impact Brazil’s sovereign credit rating.
“The risk is that the government would have to provide financial support to Petrobras in the event of an acceleration of debt,” Moody’s sovereign analysts for Brazil Mauro Leos told the Financial Times.