According to a recent report by Brazil’s National Oil Agency (ANP), oil companies based in the country are expected to invest approximately BRL 21 billion (USD 4.3 billion) in exploration efforts through 2027, with about 29 percent of the funds expected to be spent before the end of this year.
The funds will be used for studies to determine the presence of oil and natural gas in sufficient quantities to make extraction economically viable.
In practice, the announcement symbolizes Petrobras’s insistence on exploring offshore oil reserves off the mouth of the Amazon River — in a region known as the “Equatorial Margin,” which encompasses the northern and northeastern coasts of Brazil.
According to the agency, the region concentrates the largest volume of investments for the next five years. The Campos and Santos basins, both in the Southeast region and part of the massive pre-salt layer discovered in 2006, came in second.
In May, Ibama, Brazil’s environmental protection agency, denied Petrobras permission to explore the Equatorial Margin. The region has been compared to the gushing pre-salt reserves that account for nearly three-quarters of the oil major’s output. But it is a highly sensitive socio-environmental region, with many protected areas, indigenous lands, and great biodiversity.
The Equatorial Margin is a high-risk, high-reward proposition, Aatisha Mahajan, vice president of oil exploration at consulting firm Rystad Energy, told The Brazilian Report in June.
Rystad Energy estimates the reserves’ potential at 5 billion barrels of oil equivalent, but puts environmental concerns at the top of its risk matrix. “This is a very active area, with currents and sediments coming from the [mouth of the Amazon],” Ms. Mahajan tells The Brazilian Report.
According to the ANP, there were 20 notifications of oil discoveries in Brazil in 2022, 54 percent more than the year before.
At the end of the year, 295 oil blocks were under contract, an increase of 19 percent. Of these, 17 percent were suspended, mostly due to delays in environmental licensing. The agency also reported that 23 wells were drilled, one more than in 2021.
“To ensure the increase of exploratory activities in Brazil is to ensure the country’s energy security,” said ANP director general Rodolfo Saboia. “In 2022 alone, the ANP distributed around BRL 130 billion in royalties, special participations, and signing bonuses.”
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