Petrobras (Brazil Petroleum S.A.) informed the National Petroleum Agency (ANP) that it discovered oil and gas in five wells in the Sergipe-Alagoas Basin, in Northeastern Brazil. The total reserves are on the order of 76 million barrels of light crude, and accoding to Petrobras, of excellent quality.
The future deep-water production area was given the name of Piranema Field. The depth of the ocean at the site varies between 1,200 and 1,600 meters.
Despite the wording of Article 177 of the Brazilian Constitution, which affirms that prospecting and extracting petroleum and natural gas in Brazilian territory is a government monopoly, in 1997 Congress approved, and the President at the time, Fernando Henrique Cardoso, ratified, Law 9478/97, which relaxes this definition.
Based on this law, the National Petroleum Agency (ANP) was authorized to auction large areas potentially rich in gas and petroleum, giving the winners the opportunity to research, produce, and sell the fuel eventually discovered there.
Petrobras’s presumed lack of capital to conduct research and extraction in its own basins, delaying the development of a productive park capable of generating billions of dollars for the country, was the reason alleged then for approving the law of flexibility.
At the time, scores of civil and labor organizations protested against the law, claiming that petroleum is not like other products, but is strategic for the country””and, therefore, should remain under Brazilian control, not that of multinationals like Shell or Exxon, which actually took part in the auctions.
In the Administration of President Luiz Inácio Lula da Silva, auctions of large basins continued to be held. The largest auction ever of this type in the country’s history occurred in August: the 6th Round of Bidding for Areas for the Exploration and Production of Petroleum and Gas.
295 blocks were offered in the mature basins of Espírito Santo, the Recôncavo (coastal region of Bahia), and the Potiguar (coastal region of Rio Grande do Norte), 680 blocks in 29 ocean zones in various states, and others in 9 land areas.
In the five rounds it has already overseen, the ANP has conceded a total of 189 blocks for the exploration and petroleum in the country, attracting around 70 new firms to the Brazilian petroleum sector.
Referring to the 6th Round, the ANP’s superintendent of Definition of Blocks, Milton Franke, believes that the conditions are the best possible ones, not only due to the international situation””with the rise in petroleum prices””but also as a result of the credibility the government has been achieving with its policy of economic stability.
Dozens of civil and labor organizations have called for the cancellation of the auction. Américo Chaves, president of the Association of Graduates of the Higher War College (Adesg), which is one of the organizations opposed to the 6th Auction, affirmed that it would be the same as “auctioning our children’s future.”
According to him, the world will have petroleum for, at most, another 40 years, and Brazil, for only another 18. “I believe that people with a longer view cannot negotiate this energy that is so scarce within our own country. How are we going to sell to foreigners what we have so little of for ourselves?,” he asks.