Brazil to require shale probes as part of onshore gas licensing round

Brazil will require oil and gas companies to test the shale gas potential at a number of onshore exploration blocks that it is offering as part of its 12th licensing round, the country's energy regulator said Tuesday.

Brazil's 12th Bidding Round at the end of October will offer onshore sedimentary basins of Parana, Parecis, Parnaiba, Reconcavo, Acre and Sao Francisco, which Brazil's National Agency of Petroleum, Natural Gas and Biofuels (ANP) believes hold significant reserves of both conventional and unconventional gas.

While the focus of exploration will likely be for conventional gas deposits, the government is keen to start evaluating the shale gas potential of the blocks, ANP head Magda Chambriard said.


Winning bidders in the round will be required to drill into shale source rocks in some of the basins as part of work commitments on the acreage Chambriard said. The well results must then be submitted to ANP for review.

"If the analysis is good then they can go ahead and develop the shale, if it's not, we will [at least] have good information of the shale potential," Chambriard told reporters in London.

Brazil, which produces more than 80% of its power from hydroelectric dams, is looking to generate more from gas-fired plants to avoid outages during droughts and to produce more gas domestically to cut its dependency on imports of LNG.

The final list of blocks for the 12th round has yet to be announced, but more 250 blocks will be offered, covering an area of 168,348 sq km, according to local reports.

Brazil has surveyed several prospective shale basins, with four included in the 12th round -- Parnaiba, Parecis, Reconcavo and Sao Francisco -- expected to hold a combined 288 Tcf of potential shale gas, Chambriard told an investor briefing in London.

The US Energy Information Administration has also estimated that Brazil's Parana basin holds a further 226 Tcf of technically recoverable reserves.

Chambriard said the estimates represent only preliminary figures based on an analogue model of rocks found in the US's prolific Barnet Shale play.