Brazil Could Turn into Oil Exporter Due to Large Offshore Reserves

Brazil's subsalt offshore reserves could contain as much as 150 billion barrels of oil equivalent and enough natural gas to turn the country into an exporter of the product, Energy Minister Edison Lobao said on Thursday.

Brazil's proven reserves in its ultra-deep subsalt area currently stand at 12 billion barrels of oil equivalent, based on 16 prospective well drillings.

"But we'll have to drill hundreds of wells and, based on that, the National Petroleum Agency estimates we can have 50 billion to 150 billion barrels (of oil equivalent)," Lobao told reporters after a presentation at the Council of the Americas in New York.

Last week, National Petroleum Agency Director Haroldo Lima had said the subsalt areas already licensed by the government could contain as much as 80 billion barrels of oil equivalent. He had also forecast the total size of the subsalt reserves may top 100 billion barrels.

Such reserves could turn the Latin American country into a major global oil producer, if they are as large as the government expects.

Lobao also said the subsalt offshore field of Jupiter, jointly explored by Brazil's state oil firm Petrobras and Portugal's Galp, is believed to be "a giant natural gas reserve."

"According to the first estimates, it is enough to make Brazil self-sufficient in natural gas, with much left to export," he said.

Brazil currently imports 31 million cubic meters of natural gas from Bolivia every day, or about half of its consumption. But political instability has turned the neighboring country into a not very reliable supplier, encouraging the government to increase investment in other sources of gas.

Asked whether Brazil is planning to increase taxes and royalties on miners, Lobao answered the government is studying the existing international models for the sector, with plans to "adjust its law according to international markets."

"It is the government interest to get a little more income (from mining taxes) but we won't do anything that hurts the mining industry in Brazil," the minister said, adding that the country's exports need to be competitive overseas.

He said the government will conclude its evaluation of the mining sector by the coming month.

Author: Jo Amey