OGX: Natural Gas Find Could Fill 25% of Brazil's Consumption
A natural gas find announced Thursday by Brazilian oil and gas company OGX Petroleo e Gas Participacoes SA (OGXP3.BR, OGXPY) could produce 25% of Brazil's current daily consumption, billionaire businessman Eike Batista said.
"The discovery was so important that I personally called President [Luiz Inacio Lula da Silva] Lula to give him the news," Batista said during a conference call.
Drillstem tests at the Parnaiba Basin discovery, dubbed California, showed natural gas pressure that indicated it could "easily" produce about 15 million cubic meters a day, Batista said.
The natural gas will be pumped directly to gas-fired power plants located above the fields and owned by OGX sister company MPX, OGX Chief Executive Paulo Mendonca added.
OGX plans to drill 15 additional wells at the site, with production expected within two years.
The discovery was announced earlier Thursday, part of a routine procedure required by the Brazilian National Petroleum Agency, or ANP, and doesn't indicate commercial viability. Oil companies must inform the ANP of indications of oil, gas or hydrocarbons in any exploratory well within 48 hours.
The discovery was made in the onshore block in the Parnaiba Basin in Northeast Brazil. Blocks from the basin were auctioned off in December 2008.
In a separate conference call with analysts, Mendonca called the find very important not only for the company, but for the country.
"Do not forget that this is an almost virgin basin," Mendonca told analysts. "The first one in the country in nearly 20 years."
OGX expects to discover not only natural gas but light oil in the exploration blocks, Mendonca added.
The oil company holds a 70% stake in the PN-T-68 block where the discovery was made through its OGX Maranhao subsidiary. Petra Energia S.A. has the remaining 30% share.
OGX holds stakes in 29 exploration blocks in the Campos, Espirito Santo, Para-Maranhao, Parnaiba and Santos basins.
-By Jeff Fick and Diana Kinch, Dow Jones Newswires; 55-21-2586-6085; jeff.fick@dowjones.com |
