Opening of Brazil gas market leaves Exxon “optimistic”

September 25, 2019

Company believes that regulatory changes in the gas industry in the country are “on the right track”.

ExxonMobil is “optimistic” about the opening of the Brazilian natural gas market, said Vania Carvalho, the company’s commercial director in Brazil. According to her, regulatory changes in the gas industry are “on the right track”, but the opening will not be completed in the short term.

“The time for this [opening] process to happen, liberalization, doesn’t happen very fast, it’s a very lengthy process. We can mention the example of the United States, a very developed market, but where this process began several decades ago until it reached the point where it arrived. In Europe, we began to think about liberalizing the gas market in the early 2000s. And so far it is not fully liberalized. The government will have to keep a continuous focus on this process in the coming years. We will have changes of government during this period, but we must continue to focus, ”said the executive during the FT Commodities Americas Summit 2019.

Vania said that for the Brazilian gas market to consolidate, the country will have to overcome some bottlenecks and promote its demand and infrastructure.

She pointed out that ExxonMobil has invested about $ 15 billion, since 2017, in expanding the portfolio of assets in Brazil. In all, it has 29 oil and gas exploration and production areas in the country, in the Campos, Santos, Sergipe-Alagoas, Ceará and Potiguar basins, and 27 of them have been purchased in the last two years. According to the executive, however, most of these assets are still in the early stages of exploration. “In the short term we will not be producing gas from this portfolio yet”.

ExxonMobil, however, has good pre-salt prospects. The oil company is a partner of Equinor, for example, in the Carcará project in the Santos Basin, which has the potential for gas production associated with oil. The expectation, however, is that the concession will start operating by reinjecting the gas.

In addition, Exxon has been betting on the deep waters of the Sergipe-Alagoas Basin. The company has acquired nine concessions in the region, close to discoveries made by Petrobras on the Sergipe coast (Cumbe, Barra, Farfan, Muriú, Moita Bonita and Poço Verde).

ExxonMobil also plans to be a supplier of imported liquefied natural gas (LNG). The company is a 30% partner in Qatar Petroleum at Ocean LNG, a joint venture that will supply LNG to Celse’s Barra dos Coqueiros (SE) thermoelectric complex.

Source: Valor