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The Brazilian Equatorial Margin is an unexplored area, but considered strategic for the oil and gas sector.
Companies like Shell have exploratory blocks in the Potiguar and Barreirinhas sedimentary basins and are awaiting the decision of the Brazilian government on exploration in the region. The president of Shell Brasil, Cristiano Pinto da Costa, said in an interview this Wednesday (12) that drilling in the region is a strategic decision that must be taken together with the National Energy Policy Council (CNPE). He said that Shell is interested in participating in the exploration, if it is approved by the government.
There are still differences in Brazilian government regarding exploitation in Equatorial Margin. The Minister of Mines and Energy, Alexandre Silveira, supports drilling, while the Minister of the Environment, Marina Silva, has been reticent. She stated in an interview that she sees exploration in the region as she did the construction of the Belo Monte hydroelectric power plant. One of the main obstacles to issuing an environmental license by Ibama is the potential environmental impact of an oil spill in the region, which is home to a system of reefs.
Despite the divergences, Shell considers that Brazil is a country with great geological potential in the Equatorial Margin and that can compete in a world transitioning to cleaner energy sources. According to a study presented by Shell this Wednesday (12), there is a need for investment in new oil fields during the transition to cleaner energy. Brazil is seen as one of the countries in which investments will be concentrated, due to lower production costs and legal security.
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Exploratory Blocks on the Equatorial Margin
Shell is one of the companies that own exploratory blocks in the Brazilian Equatorial Margin. The region is formed by five sedimentary basins: Pará-Maranhão, Ceará, Potiguar, Barreirinhas and Foz do Amazonas. A Petrobras, for example, is trying to obtain an environmental license to drill a well in the region of mouth of amazon.
Cristiano Pinto da Costa stated that Shell is studying what to do with its assets in the region. He said that the company is interested in the decision that the Brazilian government will take over the exploration on the Equatorial Margin, but that, if the exploration is approved, Shell will study whether it wants to participate or not.
Differing opinions in government
With regard to exploration Equatorial Margin, there are divergent opinions among members of the Brazilian government. the minister of Mines and Energy, Alexandre Silveira, defends drilling and wants to launch a program to increase national oil production. The Minister of the Environment, Marina Silva, has been reticent, concerned about the environmental impact of an eventual oil spill in the region.
Shell considers drilling in the Equatorial Margin as a strategic decision, which must be taken jointly by the CNPE and the Brazilian government. Cristiano Pinto da Costa stated that, if the exploration is approved, Shell will study whether it wants to participate or not.
Shell study points to need for investments in new oil fields
According to a study presented by Shell this Wednesday (12), both in the most optimistic and in the most pessimistic scenarios of energy transition, there is a need for investment in new oil fields. The difference is in the concentration of these investments, which should be concentrated in some countries and regions.
For Shell, Brazil is one of the countries where investments will be concentrated, due to lower production costs and legal certainty. According to Shell's chief energy consultant, Peter Wood, the country has a stable regulatory environment, relatively low-carbon resources, quality oil and cost-competitive infrastructure.
