New Technology Needed to Achieve Self-Sufficiency : Giant Oil Field Discovered Off Coast of Brazil
Brazil’s dream of oil self-sufficiency has moved closer to reality with the discovery of a giant offshore oil field where a test well is producing 15,000 barrels a day of light crude.
Petrobras, the state oil company, announced the discovery Monday and said the new field’s estimated capacity is between 1 billion and 2 billion barrels.
This would double Brazil’s proven reserves and increase potential production to 1 million barrels a day, which would be enough to bring Brazil to near self-suffiency.
But new technology must still be developed for the commercial recovery of the oil, which was found in the continental shelf off Campos, about 140 miles northeast of here, in water 3,000 feet deep.
No field of this size has been found before in Brazil, which is rich in other minerals but has always been short of petroleum.
Hydroelectric power provides 90% of Brazil’s domestic energy supply, but petroleum is vital as a fuel for automobiles and trucks and as feedstock for industries in this country of 135 million people.
Brazil was one of the countries most adversely affected by the sharp increase in oil prices after 1973, when it depended on imports for 85% of its petroleum needs.
Oil imports reached $12 billion a year and were a major factor in Brazil’s accumulating a foreign debt of $104 billion, the largest in the developing world.
In its drive to increase domestic sources of energy, Brazil introduced a major nuclear power program in 1974, but the recent discoveries of substantial new sources of oil have given petroleum investments higher priority.
Government officials say the once-ambitious nuclear program is being severely cut back for economic reasons, although it will not be abandoned.
The nuclear program called for construction of eight 1,200-megawatt power stations to be fueled by uranium mined and enriched in Brazil. Minister of Mines and Energy Aureliano Chaves said in an interview last week that two plants already under construction at Angra dos Reis, 50 miles south of here, will be completed. The other six plants have been deferred until Brazil’s financial situation improves.
With the huge foreign debt, a budget deficit of $17 billion and inflation running more than 200% a year, the new government of President Jose Sarney has ordered a cutback in all government spending, except for social programs for the nation’s poorest people.
The new offshore find, an extension of the onshore Campos oil field, offers a new energy base for Brazil’s expanding industrial structure, including the automotive and petrochemical industries.
Brazil’s current domestic production, after an intensive 10-year exploration effort, is 560,000 barrels a day. But another 300,000 barrels a day will have to be imported this year to meet domestic demand. The imports will cost $6 billion.
Petrobras found the new field through the deepest offshore drilling now taking place in the world.
A system to recover oil in commercial quantities from depths of more than 3,000 feet has yet to be developed. But oil production is Brazil’s highest energy priority, and Petrobras plans to make the necessary investments.
Brazil pays about $27 a barrel for oil imports, and domestic production from offshore fields is estimated to cost about $20 a barrel.
Petrobras is seeking help in its exploration program from foreign companies under risk contracts that assign unproven areas to private developers.
A contract was signed with San Francisco-based Chevron last week for exploration in the Amazon River delta off the states of Para and Maranhaoi.
So far, more than 30 companies have spent more than $1 billion for drilling under risk contracts, but only Shell has made a potentially significant offshore find, natural gas in a field near Santos, Sao Paulo state’s main port.