Brazil plans to test unconventional gas potential this year

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Thursday, March 1, 2018

The Brazilian government intends to begin pilot projects to identify unconventional gas potential this year, Décio Oddone, head of regulator ANP told reporters during an event in Rio de Janeiro.

The projects are planned for three onshore sedimentary basins: Recôncavo (Bahia state), Parnaíba (Maranhão) and São Francisco (Minas Gerais).

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"We will use these projects to generate further geological and operational knowledge as well as to analyze potential risks associated with this activity," Oddone said.

The initiative is one of several being carried out by the federal government to foster onshore activity and increase the share of natural gas in the country's energy matrix. Other examples are the Gás para Crescer and Reate programs.

CHALLENGES

Brazil will, nevertheless, have to overcome challenges to monetize its natural gas reserves, such as the lack of infrastructure to flow and transport the fuel produced in its fields.

One of the few successful onshore examples, local energy company Eneva is planning to replicate its reservoir-to-wire (R2W) model applied in the Parnaíba basin's Azulão field, recently acquired from NOC Petrobras.

Offshore, the difficulties include the fact that most of the natural gas produced is associated with oil, and is rich in CO2, which requires a costly separation process.

"Brazil has few exclusively natural gas fields, so to produce oil you have to produce gas and vice-versa. That is why we do not see Brazil as a great natural gas producer compared with other countries," Petrobras CEO Pedro Parente, who attended the same conference, told reporters.

The state-run oil company is currently building the Rota 3 pipeline, which is projected to transport the natural gas produced in the Santos basin pre-salt to the Comperj refinery and petrochemical complex, in Rio de Janeiro state.

The feasibility of the undertaking is, however, pending the closing of a partnership to enable the conclusion of the complex, including its natural gas processing unit (UPGN). A probable partner is China's CNPC, which has been in talks with Petrobras.

OPPOSITION

Meanwhile, lawmakers from Brazilian states such as Ceará, Paraná and São Paulo have submitted or managed to get approved bills to ban exploration and production of unconventional gas using the fracking process.

In 2015, the federal attorney's office filed a suit to prohibit work in all blocks acquired at ANP's 12th round, held in 2013 – the first to offer unconventional areas.

The suit affects concessions in the Paraná, Panaíba, Paraná, Recôncavo, São Francisco and Sergipe-Alagoas basin, and has led some of the concessionaires to return the blocks.

The Coesus anti-fracking group has played a key role mobilizing communities and lawmakers against unconventional gas E&P. At the end of 2017, the group was active in Mato Grosso do Sul state to alert the population about fracking risks.