Brazil Rushes to Expand Oil Search in Amazon

Encouraged by “very important” oil discoveries deep in the Amazon jungle, Brazil is rushing to expand exploratory drilling in the area, according to a senior official of Petrobras, the government-operated oil company.

The official, Milton R. Franke, expressed confidence that the discoveries will result in the first commercial oil production ever achieved in the Brazilian Amazon Basin. Independent petroleum analysts here agreed that the Amazon drilling is promising but cautioned that its full economic significance is still undetermined.

Franke, superintendent of exploration for Petrobras, said in an interview last week that within two or three months, four exploratory drilling rigs will be operating in an area near the Urucu River, a tributary of the Upper Amazon.

A single rig operating there has struck oil in two wells about 10 miles apart. The second strike was announced two weeks ago by Brazilian President Jose Sarney as “historical news.”

Franke acknowledged that more exploratory drilling is needed to determine the extent of reserves in the Urucu area. He said about 10 new wells will be drilled there by the end of the year. But he added that chances that the area will prove unsuitable for commercial oil production are already “very small.”

“We know at least that they are very important discoveries,” he said.

The two wells, called RUC-1 and LUC-1, penetrate two adjacent geological structures of about 40 square miles each, Franke said. The size and thickness of the oil-bearing structures are “relatively large,” he said.

“Those two facts make us believe that we are dealing with large discoveries,” he said.

Seismic testing from helicopters has revealed many smaller structures of the same type in the Urucu area, about 400 miles west of the Amazon city of Manaus.

No drilling has been done in the other structures. But if some of them prove productive, Franke said, “one could think in terms of 300 million to 500 million barrels” of petroleum reserves in the area.

Brazil’s total proven reserves are currently listed by Petrobras at 2.3 billion barrels. The bulk of the deposits are in the offshore Campos Basin, under the Atlantic east of Rio de Janeiro.

In addition to the 2.3 billion barrels, Petrobras has discovered an estimated 2.8 billion barrels in two large new fields, called Albacora and Marlim, in the Campos Basin. But most of Albacora and all of Marlim are covered by water more than 1,300 feet deep.

Petrobras, a world leader in deep-water drilling, has been unable to operate a producing well in more than 1,280 feet of water. But Franke said both Petrobras and foreign companies are on the verge of technical breakthroughs that will make production possible from much greater sea depths.

Meanwhile, the company continues to explore and develop new fields in shallower seas within the huge Campos Basin. For example, Franke said, three fields--Carapeba, Pargo and Vermelho--will add 100,000 barrels a day to Brazil’s output when they go into production next year.

Brazil currently consumes about 1 million barrels of petroleum a day and produces about 600,000 barrels a day. About 360,000 barrels a day come from the Campos Basin.

In 1974, when the Campos deposits were discovered, Brazil was producing about 182,000 barrels a day. Most of that came from land wells near the country’s northeastern coast.

Production from the first fields developed in the Campos Basin has begun to decline in what appears to be a natural process of depletion. Last December, Brazil’s daily production fell below the December, 1985, level.

A foreign petroleum analyst said the decline may be temporary but it indicates Brazil’s constant need for new discoveries.

Prospects Improved

“It’s getting harder and harder to stand in one place,” the analyst said.

He said geologists have long been skeptical about the prospects of finding commercial oil deposits in the Amazon Basin of Brazil.

“It’s starting to look better, though,” he said.

Advanced seismological instruments and the use of computers for analyzing results have produced more encouraging information about the region’s geological formations. Vast areas still have not been explored with the new technology.

The first well drilled near the Urucu River came up a gusher in October. The flow from the well was measured at more than 900 barrels a day of premium-grade crude oil.

Last week, Petrobras reported that the flow from the second well was more than 600 barrels a day of condensate, a liquid hydrocarbon obtained by cooling or compressing natural gas that is generally more valuable than crude.