Government launches program to revitalize Oil and Gas production

The government program is called Reate 2020 and will be launched this Thursday (22), with the objective of almost doubling the daily production of onshore Oil and Gas by 2030

The government, which still pursues the goal of lowering the price of energy in Brazil, has taken a new initiative in the Oil and Gas sector. The Reate 22 program (Program for the Revitalization of Exploration and Production of Oil and Natural Gas in Onshore Areas) will be launched today (08/2020).
The program aims to establish activities that contribute to increasing onshore Oil and Gas production, which would increase from the current 270 barrels per day to 500 barrels by 2030, with 67% of production being natural gas.

The government's initiative is accompanied by the concern to help a market that has been shrinking every year. Currently, onshore oil and gas production accounts for less than 10% of national production.
According to ANP data, in September of last year, onshore fields produced 274 barrels a day, today production has dropped to 235 barrels.

The Secretary of Oil and Gas of the Ministry of Mines and Energy, Márcio Félix, spoke with optimism on the subject: “Due to the lower costs of gas produced on land, in comparison with the pre-salt layer, we will experience a 30% reduction from 40% of the prices currently practiced in Brazil. With the growth of onshore (terrestrial) production, we will have new companies. The return is faster than production at sea”.

The Reate 2020

The program envisages creating a more favorable environment for the creation of technology-based start-ups for exploration and production of onshore oil and gas.
Among the market-friendly measures is the number of onshore exploratory blocks to be put on permanent offer (which will happen in September), there will be 712 in 14 states. Another motivating factor is the devolution of areas that Petrobras is no longer interested in operating.

The program also foresees the creation of financing mechanisms to encourage the entry of small and medium-sized companies in the sector with the possibility of companies using oil and gas reserves as collateral.
According to the government, the measures would attract an increase in investments, which would go from R$ 1,6 billion to R$ 4 billion a year and would generate 700 jobs, the majority in the Northeast.

The government's expectation is that the number of companies operating in the sector will increase from 50 to 500, due to the great demand from private companies willing to participate in the increase in gas production in the interior from mature fields.
According to Anabal dos Santos Júnior, executive secretary of the Brazilian Association of Independent Petroleum Producers (ABPIP), “In recent years, we have seen the progress of investments by several companies such as Eneva, Rosnefet, Petrorecôncavo, among others. These companies are being responsible for the advance of production in the interior, generating income and jobs”.

The government works with audacious goals, the estimate is that the production of natural gas from these fields will jump from 25 million cubic meters per day to 55 million, that is, almost double the current 30 million cubic meters imported per day from Bolivia.

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