O&G Exploration to Increase in Brazil

Brazil has been investing in a major effort to increase its exploratory O&G campaign along the countries coast and also inland where major gas reservoirs have been recently located. Unfortunately, this is still not enough as presently Brazil is exploring only 4% of its areas with O&G potential. Of the 7,5 million square kilometers of sedimentary basins located in the country, only 7% have actually been researched, including all the recent major pre-salt discoveries. This points to major untapped O&G potential in the country, the numbers are impressive and point to a need to increase even more the research and exploration of the huge areas still untouched. This further increase in exploration brings various safety and environmental risks along with it. As it is the exploratory effort being undertaken in Brazil can be considered massive and environmental safety concerns are already alarming, especially the risks related to deepwater pre-salt exploration, production and produce transport. These risks cannot be taken lightly, yet the main concerns operators, investors and even the local government have are mostly related to technical challenges and procuring investment funds, leaving environmental safety almost as an afterthought. At the Santos Basin, which encompasses an area of roughly 150 thousand square kilometers, about 30% or 46 thousand square kilometers are actively being explored. The national operator, Petrobras, estimates that the discoveries made up to this point amount to around 15 billion barrels boe, yet some geologists in Brazil, based on seismic studies of the various Brazilian sedimentary basins, believe there is potential to uncork up to 55 billion barrels boe. There is obviously tremendous potential for more major pre-salt and also major post-salt discoveries along the Brazilian coast and massive gas reservoirs have been recently discovered inland, mainly along the remote Amazon, in basins such as the Solimões and Parnaiba Basins. Many local and foreign operators believe that the country would be better off if there were an increase in the areas offered during the next tendering rounds, yet the ANP and the Brazilian government appear to be reluctant to increase the offer, something which may decrease the number of interested investors, in the long run. The hard truth is that the country needs to uncork as many these potential reservoirs as possible in the near future in order to capitalize on the interest investors and operators have in exploring these areas and obviously to pocket the proceeds in order to re-invest in the country and its population. At the same time major investments need to be made in technologies and procedures targeting safer O&G exploration and production, because at increase rates of E&P, the risks to the environment increase dramatically.