Petrobras bets on the Equatorial Margin as a new oil horizon

RIO DE JANEIRO, BRAZIL – The Brazilian oil company Petrobras will invest 1 billion dollars in the next few years in the drilling of eight exploratory wells in its concessions in the so-called Equatorial Margin in the hope of discovering a new and promising oil horizon, its leaders said Thursday.

“We have planned in our Business Plan to invest up to $2.025 billion to drill up to eight wells in that region, but we still don’t have all the environmental licenses,” said Petrobras Exploration and Exploitation director Fernando Borges at a press conference.

The Equatorial Margin comprises the marine basins in the Atlantic Ocean on both sides of the Equator, a region that in Brazil includes the mouth of the Amazon River and in which both Guyana and Suriname have discovered important deposits.

Borges explained that in Brazil the Equatorial Margin includes not only the area in front of the mouth of the Amazon, whose possible exploration has generated intense controversy due to the existence of an important and delicate chain of corals, but also the marine basins of Barreirinhas, Pará-Maranhao and Potiguar.

“We have several concessions in these four areas, but so far we only obtained environmental licenses to explore one, that of Pitú, a deep water concession in the Potiguar basin,” he admitted.

The executive affirmed that, once the respective license is obtained, which is expected for this year, Petrobras’ plan is to drill two wells and then the other six depending on the results.

“The exploratory work depends on the results obtained. If reserves are discovered, we can continue, but if not, we have to review it,” he said.

Borges affirmed that Petrobras considers the Equatorial Margin as a quite “interesting” and “promising” exploratory horizon, and cited the findings in the Guayana and Suriname area, where reserves with 10 billion barrels have already been confirmed.

“We see the great successes of Guyana and Suriname in those areas and we have a concession about 30 kilometers from the border with Guyana. We are still waiting for the environmental licenses to explore in the last frontier that Petrobras and Brazil have and that can be similar in terms of volume to the pre-salt,” he said.

The pre-salt is the horizon that Petrobras discovered in very deep waters of the Atlantic under a two-kilometer layer of salt and whose gigantic reserves are turning Brazil into one of the world’s largest oil exporters.

Petrobras, a state-controlled company with publicly traded shares, has six concessions to exploit hydrocarbons in an area some 120 kilometers off the coast of the state of Amapá in front of the mouth of the Amazon.

The rights to these areas were awarded in 2013 to a consortium formed by the French energy giant Total (40 %), the British BP Energy (30 %) and Petrobras (30 %), but the European companies, under pressure from environmental groups in their countries, abandoned the project and sold their shares to the Brazilian company.

Different environmental groups have denounced the danger to the coral reefs in the region, of great biological richness and very recently discovered, in the event of an accident in oil operations.

Borges added that Petrobras’ Business Plan foresees the drilling of about twenty exploratory wells in 2021 and 2022 (eleven in the Campos offshore basin, six in the Santos offshore basin, two off the state of Espírito Santo and two in the Equatorial Margin) because the company, like any oil company, has to constantly renew the exploited areas.

“The production of the fields naturally falls between 10% and 12% per year, and that is why we have to make important efforts to discover new ones”, he assured.

According to the executive, to keep its current production stable, which was 2.78 million barrels of oil and natural gas per day in the first half of the year, Petrobras has to add 240,000 barrels of new production every year.