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U.S. oil major Chevron Corp. (CVX) launched its first offshore production in Brazil earlier this year, betting that the company's entry into one of the world's most-promising oil patches will become a springboard to a larger role, and a hydrocarbons bounty for future decades.

In June, Chevron pumped the first oil from the Frade field, situated 120 kilometers off the coast of Brazil's Espirito Santo state. Chevron joined Royal Dutch Shell (RDSA.LN) and Devon Energy (DVN) in the select group of foreign oil majors producing crude in Brazil, where state-run energy giant Petroleo Brasileiro (PBR), or Petrobras, dominates.

The Frade start-up is part of a turning point at the California-based company. After years of treading water in its quest to grow production and reserves, Chevron is now poised to increase its output faster than other big international oil companies in the short term.

Chevron has a portfolio of more than 40 projects, in which it is investing more than $1 billion each. Fifteen of these projects are in Africa and Latin America.

"We've never had a period where we've brought on so many big projects, ever," said George Kirkland, the company's executive vice president for global upstream and gas, in an interview with Dow Jones Newswires at the company's San Ramon, Calif. headquarters.

But in the never-ending quest to find new sources of crude amid rising oil demand and falling output at mature fields, the key question is "how good are we going to be bringing the next set in," said Kirkland, who will take over as vice chairman next year.

That's where Brazil enters the equation. In Chevron's outlook, the region's oil riches are such that it could one day join West Africa and the U.S. Gulf of Mexico as one of the company's main production and exploration hubs.

But Chevron's not alone in its intense interest in Brazil's subsalt region and possible partnerships with Petrobras, which will lead development of the oil patch. Exxon Mobil Corp. (XOM), Hess Corp. (HES), Galp Energia (GALP.LB) and Spain's Repsol YPF (REP) already have stakes in the ultra-deepwater blocks.

The subsalt oil discoveries were made recently under a thick layer of salt in the Santos Basin off the coast of Sao Paulo and Rio de Janeiro states. The oil lies under more than 2,000 meters of water and a further 5,000 meters under sand, rock and a shifting layer of salt.

The first of the subsalt discoveries, called Tupi, was estimated to hold recoverable reserves of between 5 billion and 8 billion barrels of oil equivalent, the Western Hemisphere's largest oil find in more than 30 years.

But the scope of the finds caused a change in Brazil's regulatory landscape, creating a much different scenario than when Chevron first decided to begin developing Frade in 2006. Brazil's left-of-center government recently joined the parade of South American countries asserting more control over their natural resources.

On Sept. 1, Brazilian President Luiz Inacio Lula da Silva fulfilled his pledge to change the country's oil laws in an effort to use money derived from newfound oil deposits to improve education and ease the country's crushing poverty problem.

The government proposed a mixed framework that includes a production-sharing regime for subsalt and other "strategic" oil fields, as well as open concessions. Petrobras was installed as the sole operator for the government-owned exploration blocks, leaving foreign companies in a subservient role.

Even though the new law doesn't go as far as countries like Venezuela and Bolivia in shutting foreign companies out, it is clear that "now Petrobras is going to be the boss," said Tom Liskey, Latin America regional manager for energy consultancy IHS.

The changes surprised Chevron. "This change in direction of leasing opportunities - I'd have to characterize it as a disappointment," Kirkland said. "We want to grow there like anyone else."

Despite the changes, Kirkland noted that Chevron has several other projects in Brazil and that the company's relationship with Petrobras, with which it has partnered in Africa and the Gulf of Mexico, is strong. IHS's Liskey says the relationship between Petrobras and foreign companies "has been very fruitful for both sides."

Kirkland also stressed that the oil business requires careful planning over many decades, and both legal frameworks and perceptions of risk change with time.

"We also have to have patience," he said. "Our business is a long-term business."

-By Jeff Fick and Angel Gonzalez, Dow Jones Newswires; 55-21-2586-6085; Jeff.Fick@dowjones.com and Angel.Gonzalez@dowjones.com