Agip, YPF and Shell reveal exploration plans for Brazil

Jun 23, 1999 02:00 AM

Agip, YPF and Shell have already budgeted their exploration plans for the areas bought in Brazil's first oil right auctions.
The oil companies have little time to play with as the exploration and production concessions are time limited with no provision for renewal. For this reason, large sums will be pumped into the sector in a short space of time so that the companies can reach the billion-dollar production phase as quickly as possible. "We want to pass the billions phase as quickly as possible," says the president of the Argentine oil giant, YPF, in Brazil, João Carlos de Luca.

The Italian oil firm, Agip, which bought the rights to Santos basin block 4 and Potiguar basin block 1 outright and two other blocks in consortia, says it will have to spend $ 500 mm to develop the sites over the next 4 years.
Rocco Valentinelli, Agip do Brasil president also revealed that the company is negotiating with Petrobras in order to ease the financial burden and gain valuable technical expertise.

YPF will spend $ 200 mm in the exploration of the four blocks it gained as part of consortia and the same amount again in its various partnerships with Petrobras. "We are in a hurry," declared YPF president Luca, who says he hopes to start drilling in the newly acquired areas at the beginning of next year.

Meanwhile, Shell has put its exploration budget for its 12.5 % stake in Foz do Amazonas block 1 at $ 400 mm.

The big winners in the exploration phase will be the seismic survey companies: PGS, Western, Geco/Schlumberger, Spectrum, Geomag, Veritas, Horizon Exploration, Fugro Geotem and GSI, all of whom already have operations in Brazil.
However, the Brazilian National Petroleum Agency (ANP) estimate that domestic suppliers will also gain a $ 360 mm boost in the next two years with the flurry of exploration activity.
For both Agip and YPF, the expansion of their operations in Brazil is a priority. "We waited 50 years for this moment, Brazilian oil deposits look very promising," said Valentinelli, adding that the firm hopes to close further exploration and production partnerships with Petrobras in the future.
"Brazil is our zero priority. And we are optimistic about the chances of success in the blocks we chose. They were the most keenly disputed because the chances of beginning the production phase quickly are great," said YPF president Luca.
The two firms also confirmed that they will take part in Brazil's next round of oil rights auctions which will probably happen early next year.

Source: IINX via Iinoil
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