Brazil’s state-controlled oil company Petrobras discovered natural gas in an onshore field near an area where Brazil plans to auction exploration licenses later this year.
The gas discovery at the Ilha Pequena block in the Sergipe Basin hasn’t been declared commercial yet, the National Petroleum Agency said on its website. Petrobras also found oil at an offshore well in the Campos Basin, where the company produces more than 85% of its oil, the agency said.
Brazil plans to auction 174 blocks onshore and off the nation’s north-eastern coast, which have similar potential to the “huge reserves” discovered in the Gulf of Guinea in West Africa, according to a report last month by Tauil & Chequer Advogados, a Brazilian law firm that focuses on energy.
Brazil and West Africa may hold some of the same oil deposits developed millions of years ago before the Atlantic Ocean was created by the separating continents.
“Much has been said about the geologic similarity between Africa’s west coast and Brazil,” Max Bueno, an analyst at Spinelli SA in Sao Paulo, said. “You should expect greater participation in the blocks from operators who are in Africa.”
Tullow Oil and Anadarko Petroleum Corp. (APC) are developing the 250,000 barrel-a-day Jubilee field in deep waters of the Gulf of Guinea. Oil companies including BP Plc, Total SA (TOT), Statoil ASA (STL) and Chevron Corp. (CVX) have said they may compete in Brazil’s so- called 11th bidding round set to occur in September or October.
Brazil aims to more than double oil production by 2020 as Petrobras and other producers develop offshore sub-salt reservoirs.