UPDATE 1-Petrobras sees oil, gas output up 14 pct in 2008

(Adds CEO's comments on Tupi field)

By Andrei Khalip

RIO DE JANEIRO, Dec 20 (Reuters) - Brazil's state oil company, Petrobras, expects domestic oil and gas production to rise more than 14 percent next year from the average so far this year as platforms that had come on stream with delays in 2006 reach capacity and others kick in.

Petrobras (PETR4.SA)(PBR.N) said in a statement output should rise to 2.36 million barrels per day of oil equivalent.

It did not provide separate figures for expected oil and natural gas output. In the first 11 months of this year, oil production averaged 1.79 million bpd and gas output was about 271,300 bpd in oil equivalent.

The company said it would spend 25.9 billion reais ($14.4 billion) in 2008 in exploration and production out of a total investment of about 55 billion reais, in line with its previously announced five-year strategic plan.

This year, Petrobras had been expecting a production rise of more than 10 percent, but delays with starting up new platforms have left output so far in 2007 practically flat compared with last year's 1.78 million bpd.

TUPI FIELD

Petrobras did not provide a proven national reserves level for 2007, but said the reserves, which stood at 13.75 billion barrels in 2006 under the Society of Petroleum Engineers criteria, should "maintain a continuous growing trajectory, now strongly boosted by recent discoveries in the Tupi area."