A Norwegian Oil Company Could Play a Key Role in Brazil’s Gas Transformation
Brazil has plans to create a competitive gas market. Equinor is operating two big projects that could offer a model for how a company not named Petrobras could market gas produced offshore.
Equinor could play a critical role in Brazil’s drive to boost its economy by opening up its gas markets. The Norwegian oil company operates two huge deepwater blocks with enough gas to lower prices in the country where big users pay some of the highest prices in the world.
The development plan for one of those blocks, BM-C-33 in the Campos Basin, would deliver an average of 14 million m3/d of gas—about 15% of the country’s gas demand on a high-consumption day, which is about 92 million m3/d, based on data from Rystad.
A second project in the heart of the presalt, Bacalhau, could become a model for how an international oil company can market gas successfully in the country’s richest oil play, the Santos Basin presalt.
The gas potential in that play is also huge; the gas/oil ratio is high compared with other Brazilian fields but has largely been untapped.
So far, Equinor and its partners in the projects have not committed to developing gas on either lease, but Equinor appears to be seriously considering doing so. The big question it needs to answer is what the gas market there will look like in a year or so.
Brazil has set out to promote domestic gas supplies by ending Petrobras’ virtual monopoly in the pipeline business in favor of a less-regulated, competitive gas market.
Equinor avoided gas sales at Bacalhau with an $8 billion Phase 1 plan that will use the popular practice of reinjecting produced gas. Gas reinjection maintains reservoir pressure and allows the development to comply with Brazil’s ban on routine flaring.