Dec. 13 (Bloomberg) -- Chevron Corp., the second-largest U.S. oil company, may produce up to 110,000 barrels a day in Brazil by 2015, an amount equal to 4 percent of its current output.

Chevron is planning to develop three different fields in Brazil's offshore region with government-controlled Petroleo Brasileiro SA in an investment program that may top $3 billion, Ali Moshiri, 53, who heads the company's Latin American exploration and production unit, said in an interview yesterday. San Ramon, California-based Chevron began exploring in Brazil in the late 1990s and currently has no production in the country.

``Our target is to produce more than 110,000 barrels a day between 2010 and 2015,'' Moshiri said. ``Chevron has the largest reserves in Brazil after Petrobras.'' Chevron's projected Brazilian output is equivalent to the company's daily Gulf of Mexico crude production.

Chevron is developing Brazilian discoveries, along with new projects in Kazakhstan, western Africa and the Gulf of Mexico, to boost reserves and capitalize on high oil prices. Brazil has opened its doors to foreign oil companies in contrast to Venezuela and Bolivia, which have tightened restrictions.

Chevron said in October that its daily output was the equivalent of 2.7 million barrels of oil.

Brazil is becoming one of the world's fastest growing oil producers. Petrobras expects to spend $87.1 billion by 2011, part of a plan to nearly double its output to about 4 million barrels a day by 2015.

Transocean Rig

Production from the Frade field, in which Chevron holds a 51 percent stake, is expected to start in the first quarter of 2009, with output peaking at 80,000 barrels a day, Moshiri said. Petrobras holds a 30 percent stake in the field, while a consortium of Japanese companies holds the remaining stake.

``The overall investment in Frade will be over $2 billion spread among the partners,'' Moshiri said. ``So far, everything is moving in the right direction.''

Chevron earlier said it will pay $350,000 a day to lease a Transocean Inc. rig to drill at Frade starting in 2008. Transocean is spending $300 million to refurbish the vessel so it can drill in water as deep as 6,500 feet. The vessel is expected to arrive off the Brazilian coast in early 2008. Chevron has an option to extend its three-year contract for the rig to five years.

PapaTerra Field

Chevron is also moving forward on the PapaTerra field, which may hold more than 2 billion barrels of heavy crude oil, Moshiri said.

``We have declared the field to be commercial and are looking at its development,'' said Moshiri. ``Production is slated to start after 2010-2011.''

Chevron holds a 37.5 percent stake in the field, with Petrobras holding the rest.

The two companies are also evaluating a third field, Block BC 20-609, which is close to PapaTerra. Chevron hold 30 percent of that field, with Petrobras holding the rest.

A decision on its commerciality will be made soon, Moshiri said.

Chevron, which holds a 30 percent stake in Venezuela's Hamaca heavy oil venture, remains in talks with the government over the future of the project. Venezuela, the world's fifth- largest oil supplier, wants to take a majority stake in Hamaca and three other heavy oil enterprises. Other shareholders include Exxon Mobil Corp., ConocoPhillips, and France's Total SA.

El Nacional reported last week that Venezuela's state oil company had reached a tentative agreement with the shareholders. Moshiri declined to comment on the report.

Gas Developments

Chevron also remains in talks with Venezuela over the development of offshore natural gas blocks in the Deltana Platform field, which straddles Venezuela's border with Trinidad and Tobago, said Moshiri.

Chevron is the lead developer in Block 2 and Block 3. Exploratory drilling in Block 2 found recoverable reserves of about 7 trillion cubic feet, while drilling in Block 3 found reserves of between 300 billion and 500 billion cubic feet, Moshiri said. Chevron is now starting seismic studies on a different part of Block 3 in bid to boost reserves, Moshiri said.

``We can't comment on when production will begin,'' Moshiri said. ``That depends on a decision by the government. We continue to talk to the government.''

LNG Project

The company plans to submit a development plan for the fields next year, Moshiri said. Chevron is also holding preliminary talks with the government over its participation in a liquefied natural gas plant, Moshiri said.

``According to the license contract, which is written very clearly, 10 percent of the production is supposed to go to the domestic market, and 90 percent to LNG,'' Moshiri said. ``We are going to proceed with that unless we are told otherwise.''

Chevron shares rose 55 cents, or 0.7 percent, to $74.40, after hitting a 52-week high of $74.72. The shares have risen 31 percent this year.

Irving, Texas-based Exxon Mobil Corp. is the world's largest publicly traded oil producer.

To contact the reporter on this story: Peter Wilson in Caracas at pewilson@bloomberg.net.

Last Updated: December 13, 2006 16:31 EST