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Brazil adds to gas reserves with new onshore find

June 28, 2011 at 12:50 PM   |   Comments

RIO DE JANEIRO, June 28 (UPI) -- Brazil seems poised to add significant new quantities of natural gas to its expanding reserves of crude oil and gas on land and at great depths of its Atlantic Ocean coast and seabed.

News of the latest discovery of natural gas coincided with industry reports the government of President Dilma Rousseff would likely call an auction later this year to draw new investment into new exploration projects in the Sergipe Basin in the northeast of the country.

The International Energy Agency last month declared natural gas the leading fuel of the future and predicted the global natural gas industry could be entering a "golden age" if all conditions for its responsible exploitation were met by the operators.

Brazil has been on a winning streak, with oil and gas discovered up to 200 miles offshore, and the bonanza has transformed the country's development planning and also led to increased military spending to protect the newly found wealth.

Spanish oil and gas group Repsol YPF, meanwhile, said its Brazilian joint venture with China's Sinopec Group had also made a new discovery of good quality oil in ultra-deep waters off the Brazilian coast.

Repsol said in a statement the Gavea exploration well could be the most significant find made in the pre-salt area of the Campos Basin, already famous for large finds.

It said the consortium is analyzing the results of the well.

The state-controlled oil company Petrobras said its experts found the natural gas deposits in an onshore field close to an area where exploration licenses are due for auction later this year.

Officials said up to 174 exploration blocks could be put to auction. It was not immediately clear if the new gas discovery would influence Brazil's decision on the makeup and scale of the planned auctions.

Petrobras also did not say when it would declare the gas find commercially feasible.

The discovery at the Ilha Pequena block in the Sergipe Basin adds to a growing inventory of hydrocarbon finds at a time when Brazil says it wants to concentrate more on renewable energy.

Some of its renewable energy plans, however, have met with opposition from environmentalists. Brazil's plans for the giant Belo Monte Amazon dam complex met with international disapproval because of fears it would devastate ecology of a vast pristine region. The government says it needs the hydroelectric project to meet growing energy demands.

Brazil aims to more than double oil production by 2020 as offshore sub-salt oil wells begin coming on stream. It also has plans to expand its infrastructure for development of gas reserves.

© 2011 United Press International, Inc. All Rights Reserved. Any reproduction, republication, redistribution and/or modification of any UPI content is expressly prohibited without UPI's prior written consent.
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