Brazil, Portugal to Jointly Explore Oil in Portugal

Brazil's state-owned oil company Petrobras and Portuguese company Galp Energia announced on Thursday that they will start a consortium to explore oil reserves in Portugal.

The Portuguese government will announce the concession of two zones with a water-depth of 3,500 meters along the Portuguese coast in the next few weeks, according to officials of the companies.

The two companies will have three years to complete the prospecting in the exploring zones. If they do not start the oil extraction in four years, the consortium will lose the government's concession.

Petrobras will be responsible for the technology used by the consortium while Galp will finance the project.

This is the first offshore oil exploration project in Portugal. Until now, companies have only developed onshore prospecting, but none of the fields proved to be rich enough to maintain the oil exploration in the country commercially viable.

Petrobras was chosen for the consortium because of its success in other deep-water fields, officials said.

The Brazilian company achieves 56 percent of its deep-water projects, a huge percentage if compared to the average 12 percent achieved by other companies.