Brazil's Natural Gas is New Black Gold
12/14/99
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Title: INTERVIEW - Brazil's natural gas is new black gold
Source: Reuters
Status: Copyright 1999, contact source for permission to reprint
Date: December 14, 1999
Byline: Tracey Ober
RIO DE JANEIRO - Years ago, when Alvaro Teixeira was a young geologist
drilling for oil in Brazil's deep water reserves, he used to call it a
disappointing "dry well" if he found only natural gas but no crude.
Now, as the snowy-haired head of the Brazilian Petroleum Institute
(IBP) - the country's main oil industry association - Teixeira
considers gas to be the new "black gold".
"The future of petroleum is gas. There are huge reserves so the next
century will be all about gas," Teixeira told Reuters in an interview
at the IBP headquarters in Rio de Janeiro. "In Brazil, we need a lot
of gas."
He expects natural gas demand to explode in Brazil in the next years
to slake the increasing thirst for energy as industrial production
grows in Latin America's biggest economy and drought parches the
country's largely hydroelectric power sources.
Teixeira said Brazil was sucking up four percent more energy every
year and the 65,000 megawatts generated annually is "not a comfortable
level".
Natural gas now accounts for only three percent of Brazil's total
energy consumption - about 20 million cubic meters per day. The
government wants to raise that proportion to 12 percent by 2010, but
Teixeira thinks it should go as high as 15 to 20 percent by that time.
The balance already started to shift in July when Brazil and Bolivia
began commercial operations of their first natural gas pipeline -
expected to pump 30 million cubic meters per day from Bolivia's rich
Andean reserves to Brazil's industrial heartland of Sao Paulo in the
southeast.
"The vicious circle was broken by the Brazil-Bolivia pipeline," the
IBP general secretary said. Before that Brazil imported little natural
gas because there was no market and no market developed because there
was limited supply.
Britain's BG Plc will soon add to the supply side with a new pipeline
bringing natural gas from Argentina.
Brazil's government has been helping create a gas market by
encouraging construction of gas-fired electricity generators to
alleviate a severe problem of blackouts in summer months when the
water need to fuel hydroelectric plants is low.
In addition to piping in natural gas from Argentina and Bolivia, where
two vast new deposits have been found recently in the San Antonio and
San Alberto fields, Brazil's giant state petroleum firm Petrobras has
just discovered big reserves at home in the deep water Santos Basin.
Petrobras, which until last year had a 45-year monopoly over the
sector, now predicts that the country can become self-sufficient in
oil and even start to export it as natural gas will help meet the
growth in demand.
Brazil is currently a net importer of oil, producing two-thirds of its
consumption of 1.8 million barrels per day.