Petro Rio S.A. HRTPF

Gas Monetization Plan - HRT, Rosneft & Petrobras

[DrillaHill]

should be finished soon:

LOI GAS MONETIZATION
December 17, 2012 - The LOI signed on October 15, 2012 has now been amended
to introduce the work plan agreed to amongst the companies, which will be further matured
over the next six months, starting January 2013

Today the production of natural gas fields in the Amazon reached 11.3 million cubic meters (m³ / d),
Natural gas production in the Amazon
while HRT petroleo has already established a subsurface resource capacity with base case 5 MM m3/d and high case of 7 MM m3/d;

HRT petroleo's Natural Gas Discoveries have the best flowrates in onshore Brazil:



M.R.Mello is confident to monetize HRT's natural gas:
INTERVIEW-Brazil's HRT sees existing gas, future oil reviving stock

AMAZON GAS OPTIONS

Regardless of any discoveries in Namibia, he expects to generate revenue from natural gas in the Amazon with Russian partner Rosneft long before the benefits of any potential African fields.

HRT, along with Rosneft and Brazil's state-controlled oil company Petróleo Brasileiro SA (Petrobras)
expects to have a plan to sell gas from Amazon fields by July, Mello said.

Reflecting its confidence in the Amazon project, Rosneft is committed to buying an additional 10 percent of HRT's Amazon unit next year, raising its stake to a majority 55 percent, he said.

HRT and Rosneft have already discovered 3 trillion cubic feet (TCF) of natural gas in the Solimões Basin of Brazil's Amazonas state and he expects as much as 10 TCF to 15 TCF of gas in five key blocks in the region. The 3 TCF figure has yet to be certified.

The most likely way to turn that gas into cash, he said, is to build thermal power stations and connect them to Brazil's growing Amazon electric grid. That will move his "trapped" power to bigger centers without expensive pipelines.

Electricity made from burning HRT's low-sulfur "sweet" gas is worth more than the
$2-$3 per British thermal unit it costs to produce that gas, he said.

Mello also hopes to use small-scale, increasingly cheap gas-to-liquids technology to transform natural gas directly into diesel fuel and gasoline. HRT has already had talks with General Electric Co and several Korean companies about equipment for power plants and other projects, he said.

"There are 30 million people in Brazil's Amazon and they use diesel and gasoline for everything," he said. "Converting the gas into fuel on site and then moving it by river to communities would be cheaper, more efficient and more environmentally sound than refining oil far away."

Mello estimated that a small, modulargas-to-liquids plant could produce
about 4,000 barrels of diesel fuel per day for about $68 a barrel, or $1.61 a gallon.
Diesel on the U.S. Gulf Coast for May delivery , a wholesale fuel benchmark, sold for $2.77 a gallon, or $116 a barrel, on Friday.

A modular plant of that size would cost about $400 million, according to Britain's Oxford Catalyst Group Plc. Oxford estimates each barrel a day of output requires an investment of about $100,000 in the plant.

HRT is also considering using gas to make fertilizer and ethanol, he said.

GLA