The company has said it will accelerate investment in its highly prospective pre-salt areas and, for now, intends to go ahead with all the 500 or so projects in its rolling five-year business plan, at a total cost of $174.4 billion.

Most of that will go on exploration and production. Between now and 2013, it says it will spend $104.6 billion on upstream ventures, which would be a 60% increase from the 2008-2012 plan’s $65.1 billion upstream spending forecast.

How is it going to pay for this?

Tricky. At a press conference in London at the start of February, chief executive Jose Gabrielli said the firm is “fully financed” for 2009. But fully financed for 2009 isn’t fully financed for long.

However, he also indicated that Petrobras is prepared to improvise — tapping new sources of funds, including some that it previously considered unattractive.

One of the possible solutions he outlined involves borrowing money in exchange for the promise of oil supplies in the future. And Petrobras has since gone down that route, forming partnerships with various Chinese companies under which it will receive funding – of up to $10 billion — in exchange for oil.

That’ll certainly help with the 2010 budget, as will a 4 February placement of $1.5 billion of 10-year dollar-denominated bonds (a change of direction: in late January, Gabrielli had said Petrobras had no plans to sell bonds in 2009 because of high borrowing costs).

Prior to those two announcements, Petrobras needed $8.9 billion to meet 2010′s capital spending plans and also needed to refinance a $5 billion bridging loan.

Assuming that the oil price is somewhere near the bottom and that costs start to come down (which they’re already doing), Petrobras’ ambitious upstream plans look increasingly favourable.

Full analysis of Petrobras’ spending plans is available from next week from Petroleum Economist (it’s a subscription service, but you can take a free trial).

Tom

The United Nations Environment Programme estimates the buildings sector accounts for 30-40% of global energy use, so building design has an important role to play in cutting global carbon emissions.

And it was a fascinating interview.

The good news, Fordham says, is that engineering a building to require minimal heating, lighting and air-conditioning isn’t particularly difficult. Insulate properly and you shouldn’t need much heating — possibly none at all. Ventilate adequately, shade from the sun and get used to going to work in shorts and a T-shirt rather than a suit and you won’t need air-con. Put enough windows of the right size in the right places and your daytime lighting needs are catered for. Electricity to supply computers, nightime lights and fridges could come from renewables.

It is even feasible, he pointed out, to build a cool, non-air-conditioned building in Egypt, where external temperatures reach 45ºC. Pyramids’ burial chambers have remained at 20ºC for 3,000 years. Not many people would want to go to work or live in a pyramid, of course, but it’s a valid point nonetheless: good design can significantly reduce energy requirements.

The bad news — as it emerged in the interview — is that the widesread implementation of the kinds of engineering solutions that he talks about are being undermined by a mish-mash of interests and incoherent planning.

The article will be available in the March issue of Petroleum Economist, available from next week (it’s a subscription service, but you can sign up for a free trial. I would do that, only I don’t have to because, as editor, I get to read the entire magazine for free every month).

Tom