Brazil oil, gas discoveries jump in 2015

Apr 10, 2015 12:00 AM

The number of Brazilian oil and gas discoveries reported in the first quarter of 2015 jumped 33% year-on-year, according to BNamericas research. Twenty-four new accumulations were found in the first three months, 16 of which were in blocks operated by state-run oil firm Petrobras. Onshore basins accounted for 14 discoveries and offshore areas, 12, according to data gleaned from records kept by Brazil's hydrocarbons regulator ANP.

The increase in new hydrocarbon finds comes despite expectations of reduced capital spending in the exploration sector, as operators move to soften the impact of falling oil prices.

Emerson Colin, a managing partner at São Paulo-based consultancy Verax, told BNamericas the figures showed that budget cuts have not yet taken effect.

"Companies have previous commitments to fulfill, and even if they plan to reduce investments, they haven't stopped operating overnight," Colin said. "There is a natural inertia. I'd say that the impact might be more clearly felt two years from now."

Last month energy consultancy Wood Mackenzie forecast an average 30% reduction in global spending for oil and gas exploration this year.

Among operators to already announce budget cuts in Latin America are Repsol, Pacific Rubiales, Galp and Pemex.

Media reports in Brazil have suggested Petrobras will slash up to US$10bn from its capital program this year. Apart from falling oil prices the company has been jolted by a federal police corruption probe.

DEEPWATER BONANZA

Eight of the offshore hydrocarbon finds reported in the first quarter were at depths greater than 2,000m.

Sergipe state in Brazil's northeast was home to the highest number of discoveries with seven. Five of those accumulations were in ultra-deepwater blocks operated by Petrobras.

Rio de Janeiro was the next most prolific state with four finds, followed by Maranhão and Espírito Santo with three each.

Two accumulations were identified in São Paulo and Amazonas, with single discoveries in Ceará, Rio Grande do Norte and Bahia.

Despite the rising strike rate in Sergipe - including ultra-deepwater fields in the Sergipe-Alagoas basin - Colin said the area was unlikely to usurp the pre-salt layer as Petrobras' top priority.

"There have been some important discoveries in the northeast but investments there don't compare to the pre-salt," Colin said. "In the next few years that's where the largest discoveries are likely to be made."

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