Petrobrás makes biggest gas discovery in the Sergipe basin since 2006

RIO DE JANEIRO -- Petrobras has made its biggest discovery in the Sergipe since the pre-salt in 2006. Of six fields, it expects to extract 20 MMcmd of natural gas, equivalent to a third of the total Brazilian production. Reported last month, the finding is expected to generate $ 7 billion in annual revenue for Petrobras and member companies, estimates Gas Energy. In the government's assessment, the achievement could help take the expected "cheap energy shock" promised by the economy minister, Paulo Guedes - a plan to reduce the cost of natural gas by 50% and "reindustrialize" the country.

The government's bet is that, in a short term, the cheapest gas in Brazil should come from Sergipe. First, by the very increase in production, which helps in reducing costs. Second, by the start-up of rivals of the oil company, such as the American company ExxonMobil, which has exploration projects in the region. Finally, by the presence of gas import companies, which will also compete for the outflow infrastructure. In this way, the trend is to reduce the transportation tariff and, with this, also the final price of the product.

"Let's have competition. This is what will make the price lower, "says Márcio Felix, Secretary of Oil and Natural Gas of the Ministry of Mines and Energy (MME), who is involved in drafting the Guedes plan.

The government is also expected to boost the region's economy with gas. From 2014 to 2017, the oil and gas chain was virtually paralyzed as a reflection of the sharp drop in the price of the international market and the revelations of Operation Lava Jato of the Federal Police, which revealed billions in resource diversions at Petrobrás. "It is possible that we will see a resumption of the oil and gas industry in the Northeast, where it all began," says Gas Energy president Rivaldo Moreira Neto.

Felipe Kury, director of the National Agency for Petroleum, Natural Gas and Biofuels (ANP), classifies the potential of the Sergipe-Alagoas Basin as "very promising." In addition to the six fields of Petrobrás, the ANP believes that there are other areas in the region with indications of presence of oil and gas that in the coming years may result in new relevant discoveries.

Based on MME data, to delimit the reservoir and build a gas pipeline to the coast, Petrobras is expected to spend $ 2 billion this year. The state-owned company does not disclose plans for the region. Through its press agency, reported that "the deep waters of Sergipe have shown great potential for development." Petrobras also reported that the project budget is foreseen in its strategic plan for the next five years. For now, the company is working only on the exploration, but not in the production of the fields.

The gas already causes a turnaround in the economy of Sergipe. "I will become a traveling salesman, knocking from door to door of industries, offering the advantages of natural gas to whoever wants to settle in the State," said the Secretary of Economic Development, José Augusto Pereira de Carvalho.

The state is now focused on attracting large gas consumers to the municipality of Barra dos Coqueiros, next to Aracaju, where the Port of Sergipe operates, and a new industrial district should be located in the future. In the small town of only 25,000 inhabitants, surrounded by beaches and mangrove, an unprecedented arrangement of companies interested in fuel begins to emerge.

On the one hand, there are producers and a gas import unit. On the other, potential consumers, attracted by the prospect of paying less for fuel. To companies, Carvalho has argued that, with so much supply, there will be no alternative to gas suppliers other than lowering the value of the raw material. So he hopes to bring back mainly glass and ceramic industries that rely on gas to manufacture better products and at a lower cost.

Sergipe also wants to encourage the creation of a new figure in the gas market - that of the free consumer, authorized to import its own fuel, without having to use the distribution pipeline network of a local utility. With this change, the expectation is to reduce the price of the product, which would not count on the tariff charged by the distributor.