Petrobras major gas discovery may help to lower energy costs in Brazil

Brazil is known to be one of the most difficult places to do business in the world, in part due to the lack of infrastructure and high costs of basic inputs, such as energy. But things may be about to change, as Petrobras assesses the impacts of its newest discovery: six natural gas fields in the north-eastern states of Sergipe and Alagoas which could generate the equivalent of one-third of Brazil’s entire natural gas production.

The discovery is being considered Petrobras’ biggest since 2006—when the deepwater pre-salt oil fields were found. Consultancy firm Gas Energy believes the estimated 20 million cubic meters of natural gas per day may generate BRL 7 billion for the company and partners each year.

For the country, the impacts may be even bigger, judging by international precedents. The increase in natural gas production due to shale gas exploitation in the U.S. has lowered prices by 67 percent from 2008 to 2017, according to Brazil’s National Industry Confederation.