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Shale gas exploration

Brazil launches well projects aimed at overcoming public opposition to shale gas and oil extraction

06/15/2018 | 11h32

Drilling at two pilot projects in Brazil meant to garner public support for shale development will begin no later than the first half of 2019, Brazil's oil and gas secretary said in an interview. 


Under the name "Transparent Wells," these pilot projects seek to overcome social and environmental concerns, Vicente de Carvalho Vieira said Wednesday on the sidelines of Calgary's Global Petroleum Show. 


With these pilot projects, Brazil seeks to align all stakeholders and "demystify" the risks and development of unconventional hydrocarbon resources, he added. 


Brazil tried to kick-start shale exploration after awarding 72 out of 240 blocks in 2013 despite uncertainties about how fracking would be regulated, creating public opposition. 

Public prosecutors in several states filed lawsuits that blocked the use of techniques such as fracking and horizontal drilling. 


"We had a very bad a start, and we are trying to recoup," Carvalho said. "The support from the state government is paramount to be able to carry these pilot projects forward." 


The two projects have the support from the state governments of Bahia and Maranhao, which support the development of responsible fracking.

 

Also, other stakeholders in the region where projects are being planned support them, he added.

 

"The idea is to prompt new environmental regulation along these pilot projects," Carvalho said.

 

The transparent well initiative will allow the public and state regulators to access real-time data on the project's water and air quality, drilling, and fracturing information, local employment and more, Carvalho said.

 

These first wells are the first steps to reduce risk and asses Brazil's shale resources, Carvalho said. If these are successful, pilot projects will be scaled up, he added.

 

The pilot projects will be located in the Parnaiba and Reconcavo basins. Brazil's National Petroleum Agency (ANP) has estimated these basin's combined shale gas resources in 84 Tcf.

 

Brazil has much to gain as a result of shale oil and gas production, Frederico Miranda, Eneva's exploration manager, said at a presentation at the Calgary conference Wednesday.

 

Brazil's second largest onshore operator, Eneva, is working on the shale pilot project at the Parnaiba basin where it holds 10 million acres with a significant shale potential, Miranda said.

 

Previously, Eneva enhanced production by five times at a vertical well located in the area where the pilot project will be established by doing a simple fracking process, he said.

 

Eneva is interested in producing shale gas to supply its growing gas-to-power project in the region, Miranda said.

 

After the presentation, Miranda declined to give further comments about the shale production potential of the area Eneva controls.

 

However, Miranda published a paper in 2014 with the American Association of Petroleum Geologists about the geological potential of the Pimenteiras Shale at the Parnaiba basin. He described the Pimenteiras shales as being 1,650 ft thick with a total organic content ranging 0.38-4.77%, making it a candidate to be a significant shale gas formation.

 

Lais Maciel, business development director with the Ministry of Economic Development at the state of Bahia, also spoke about the shale pilot project in her state on Wednesday at a presentation at the conference.

 

These pilot projects will allow state government to assess the risks and benefits of shale extraction, Maciel said.

 

"It is critical to publish information about the environmental impact of shale due to the lack of environmental regulation," she added.

 

The state of Bahia is leading a pilot project in Reconcavo basin, where there are three gas processing units, a petrochemical plant, and an LNG regasification terminal.

 

The state of Bahia has estimated that fracking could increase gas production by seven times at the Reconcavo basin.

 

Maciel said that shale production in this basin could increase gas output to 550 MMcf/d from 70 MMcf/d today.

 

Brazil's ANP estimated shale resources at the Reconcavo basin, one of Brazil's oldest and most studied regions, to be 20 Tcf of gas, Maciel added.

 

If the pilot projects are successful, major shale exploration efforts could begin in two to three years, according to Alexandre Calmon, a partner of Tauil & Chequer Advogados in association with Mayer Brown at Rio de Janerio. He made the comment in an interview Wednesday at the conference.

 

Once data is obtained from the wells, it could take a year for state environmental regulators to assess the results, he added.

 

"These pilot projects are fundamental for the future of shale in Brazil to obtain environmental licensing," he said.

 

Southern and Central-East Brazil are prolific agricultural regions that are concerned wit how fracking could affect the local water supply, he added.

 

These pilot projects have the potential to show the public that shale development can be an essential development driver without harming the environment, he added.

 

Calmon believes the local supplier base is strong enough for Brazil to avoid sharing the problems Argentina faced in developing its Vaca Muerta shale basin.

 

Also, there is infrastructure to support development in the Reconcavo and Parnaiba basins, where the pilot projects are being developed, he said.

 



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