Brazil’s energy minister calls on Petrobras to “revive” domestic industry by boosting natural gas supplies

(Bloomberg) -- Brazil’s oil giant Petrobras should increase its efforts to boost natural gas supplies and lower prices to help revive the nation’s industry, said mines and energy minister Alexandre Silveira.

Petroleo Brasileiro SA, as the state-run company is formally known, must speed up studies that will help it curb the amount of gas injected back into oil reservoirs to boost crude production, Silveira said in an interview. That will free up more gas for sale. Petrobras - and other oil majors - should also invest in new gas pipelines to increase domestic supplies, he said.

After weeks of publicly clashing with Petrobras’s Chief Executive Officer, Jean Paul Prates, Silveira acknowledged “some progress” by the company’s management. As an example, he cited Rota 3, a long-delayed offshore gas pipeline scheduled to start operations in the second half of this year.

Brazil is increasingly exposed to supply risks as gas production in Bolivia declines. But the government estimates that Brazil will be able to increase natural gas supplies by up to 150 MMcmd through projects including Equinor’s Raia and Petrobras’s Sergipe Aguas Profundas, as well as imports from the Vaca Muerta region in Argentina.

Silveira said talks are underway involving Argentina, Bolivia and Paraguay, exploring several routes for importing Vaca Muerta gas. The fuel could be shipped via the Bolivia-Brazil gas pipeline (Gasbol), or it could pass through Paraguay’s Chaco region.

“If it’s economically viable, Petrobras could in the future partner with infrastructure companies to bring in this gas,” Silveira said.