MercoPress. South Atlantic News Agency

Brazil and Uruguay sign energy cooperation

Uruguay and Brazil signed several memorandums of understanding for joint operations or cooperation in energy, oil and gas exploration, telecommunications and education sectors during a ceremony last Friday in Brasilia on the conclusion of Uruguayan president Tabare Vazquez's visit to Brazil.

"We are establishing cooperation agreements in areas considered vital for both our countries", said Brazil's president Luiz Inacio Lula da Silva following the signing ceremony.

The two neighbouring countries will create a bilateral commission to undertake geological and mining studies, while Brazilian government owned oil company Petrobras signed an understanding with its Uruguayan counterpart, Ancap, for the joint study of oil and gas exploration offshore.

The two leaders also signed to build a 500 MW transmission line to increase power exchange between both countries, complementing an existing line of 230KW that links the bordering towns of Rivera and Santa Ana do Livramento in Brazil.

If Petrobras and Ancap agree on a feasibility understanding they will aim to look for oil and/or gas in the Pelotas basin that stretches from southern Brazil to northern Uruguay, revealed Brazilian Mines and Energy minister Dilma Rouseff.

Brazil is one of the world's leading countries in offshore hydrocarbons exploration and production, and is almost self sufficient.

Uruguay energy is mainly hydroelectric and has no proven reserves of hydrocarbons, but there have been a couple of encouraging exploratory wells in the Punta del Este basin neighbouring with the Pelotas basin.

"We believe that it is very possible that the Pelotas basin will show signs of oil or gas on the Brazilian side and there is no reason to believe that this would not extend to the Uruguayan -side", added Ms. Rouseff. "Petrobras is willing to make partnerships with Uruguayan or any other company that is interested in the issue".

The Pelotas basin is one of Brazil's twenty sedimentary basins that so far do not produce oil or gas. Brazil's daily production of 1,6 million bpd comes mostly from seven basins, particularly Campos offshore Rio do Janeiro, which represents 80% of the country's total extraction.

Pelotas basin is 1,800 kilometres south of Campos and there are currently no exploration concessions in that basin.