Backed by promises of help from sovereign wealth funds, Petrobras president Jose Sergio Gabrielli has denied analysts predictions that today’s oil price is an obstacle to growing the country's rich pre-salt oil reserves.

“Pre-salt development is viable at $35 oil,” Gabrilelli said Tuesday, just as Chinese and Arab sovereign wealth funds contemplate loans and investments in Brazil’s rich offshore licenses.

Gabrielli was backed up by company chairman Dilma Rousseff, who told reporters that a prolonged, 30,000-barrel-a-day production test is scheduled at the Tupi field in March 2009. Tupi is Brazil’s breakthrough pre-salt oil discovery.

The test is expected to cost just $300,000 and ti set the stage for pilot production forecast at 100,000 bpd. The early production first requires investments of $4.5 billion, according to Rousseff, a top aid to Brazilian President Luiz Inacio Lula da Silva.

Apart from being a powerful member of Lula da Silva’s cabinet, Rousseff is a former leftist guerrilla and Lula’s possible successor. She survived years of torture in the early 1970’s after a show trial by tribunal.

Despite the ordeal, Rousseff’s policies have brought efficient administration and pro-market reform. Attracting investment has been key to Brazil’s development as an offshore oil province, including Tupi and its possible 8 MM bbls of oil equivalent.

Though Tupi could turn Brazil into a top oil producer, analysts have cautioned oil’s drop below $45 per barrel this week could be ruinous.

Meanwhile, Keppel Shipyard in Singapore is modifying the floating production storage and offshore vessel FPSO BW Peace. The ship is scheduled to serve the Tupi field and will be renamed BW Cidade De Sao Vicente when delivered by year-end 2008.

The Tupi FPSO will produce 45,000 bpd of oil and store a million barrels once installed above the deepwater Tupi.

Tags: Petrobras, Tupi field