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Brazil Auctions Dozens of Exploration Blocks in New Oil Frontiers

Oil from BrazilThe National Petroleum, Natural Gas and Biofuel Agency (ANP) has scheduled for December 18th, in Rio de Janeiro, the 10th Round of Tenders for Exploration Blocks, which will offer 162 continental blocks, divided into 11 sectors in nine sedimentary basins in the country: Sergipe-Alagoas, Amazonas, Araripe, Paraná, Pernambuco-Paraíba, Potiguar, Parecis, Recôncavo and São Francisco.

A total area of approximately 88,000 square kilometers will be offered for oil and natural gas exploration and production.

According to a release issued by the ANP, of the 162 blocks to be offered, 100 are located in mature basins, being 35 blocks in the Potiguar basin, 21 in the Recôncavo and 44 in the Sergipe-Alagoas basin.

The agency also informs that those three basins answer to approximately 10% of current oil production in Brazil. "The tender of areas in mature basins aims to encourage continental production and create an opportunity for small- and medium-sized companies to operate in the country," informs the ANP press release.

The data also show that the remaining 62 blocks are located in exploratory frontiers, seven of which in the Amazon basin, ten blocks in the Araripe basin, nine in the basin of Paraná, 18 in Pernambuco-Paraíba, six the Parecis basin and 18 blocks in the basin of São Francisco.

"The inclusion of blocks in new frontier basins is important in order to increase geological knowledge of Brazilian sedimentary basins, as well as to allow for the discovery of new oil provinces," says the ANP.

The ANP also explains that the country has 29 sedimentary basins with higher oil and gas potential, which are part of a total sedimentary area of roughly 7.5 million square kilometers.

Out of that total, only 0.3% consists of fields under development or production process, and 4.1% are under concession. The ANP asserts, on the other hand, that Brazil currently has the largest sedimentary area with oil and gas potential still to be explored in the whole world.

The decision of the ANP of including continental blocks only was based on a ruling by the National Council for Energy Policies (CNPE), issued under the orientation of Brazilian President, Luiz Inácio Lula da Silva.

Based on resolution #10 from September 3, 2008, the ruling reserves the federal government the right to launching tender rounds only in areas outside the pre-salt, in basins at new exploratory frontiers, mature b and marginal fields "with the objectives of promoting knowledge of sedimentary basins, developing the small-sized oil industry, and establishing domestic and foreign companies in the country, thus maintaining the demand for local goods and services, job generation and income distribution," according to the ANP.

ABr

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