(Reuters) – Brazil’s Petrobras could expand its operations into neighboring Guyana, if the regulatory environment does not improve in Brazil, CEO Roberto Castello Branco said on Thursday, the first official admission of interest in the hot frontier oil play.
Petroleo Brasileiro SA, as the company is formally known, has exploration interests off Brazil’s northern coast. There is speculation among geologists that parts of that area could share similar geology with Guyana, whose production is quickly expanding after a series of blockbuster offshore finds.
Petrobras executives have been asked in the past if they would be interested in the nation. However, they have consistently said that they prefer to focus on oil exploration and production in Brazil.
During the biennial Rio Oil & Gas conference, Castello Branco said onerous environmental licensing requirements in Brazil were pushing the oil firm to consider Guyana.
“We have (in northern Brazil) the potential for a great oil basin and we’re barred. At the same time, Guyana is taking advantage of the situation,” Castello Branco said.
“(Guyana) attracts us. For now, we’re continuing to invest in Brazil, but it’s possible we go over there as well, preferring that to generating value, generating jobs in a very poor region of Brazil.”
Exploration in northern Brazil has generated significant controversy and regulatory pressure in part because of the presence of an extensive coral reef off the coast of Brazil and neighboring French Guiana.
In September, France’s Total SA exited a cluster of five exploration blocks dubbed Foz de Amazonas, and sold its stake to Petrobras, following difficulties with environmental permitting.