RIO DE JANEIRO—The future of the Campos Basin, growing importance of natural gas in the energy transition and concerns about Brazil’s upcoming presidential elections were hot topics during the Rio Oil & Gas 2018 conference.

The event was held in late September as the country continues to attract oil and gas companies wanting to tap into Brazil’s hydrocarbon resource opportunities.

“Rio Oil & Gas offers an ideal forum to develop the debate surrounding the window of opportunity available to Brazil as the country looks to develop its huge presalt resources [as] demand for fossil fuels begins to fall off posing the risk that some of the reserves may end up untouched under the sea,” Brazilian Petroleum, Gas and Biofuels Institute (IBP) President José Firmo said during the opening ceremony. “This is an important discussion for a country that has needs for economic and social development.”

Campos Basin’s Future

After 40 years of intense offshore activities, the Campos Basin is facing challenges to grow production. Currently, the basin is responsible for nearly 60% of Brazil’s output; however, this percentage could drop over the next years as fields in the basin age.

During the panel focused on the basin, Petrobras executives pointed out that the area still holds great potential despite its aging process.  The Campos Basin could increase its reserves by 1 billion barrels of oil equivalent, according to Petrobras Reservoir Engineer Luiz de Abreu Neto. These oil barrels could come from the Albacora Leste, Barracuda and Caratinga, Marlim, Marlim Sul, Marlim Leste and Roncador fields.

Abreu Neto said Petrobras intends to increase its reserves through new discoveries and the revitalization of mature fields.  The “Campos Basin Revitalization Program began to be developed in 2017. In the first year of execution, the output increased 6%. There was also an increase of 22,000 barrels of oil per day of these fields,” he said during his presentation.

The engineer also mentioned that new discoveries made to expand these fields’ useful life ensured a quick return due to the existing infrastructure in these areas.

Natural Gas for Energy Transition

Natural gas also took the spotlight during the event. According to Irene Rummelhoff, executive vice president of marketing, midstream and processing for Equinor, natural gas will be crucial for the transition to low-carbon economy. “We believe in the expansion of the Brazilian natural gas market and its potential as a source of energy generation,” the executive said.

For Secretary General of the International Gas Union Luis Bertrán, expansion of natural gas increases competitiveness and helps to reduce production costs. “Natural gas has the potential to be the fastest growing fossil fuel. It is growing 1.6% per year, making it the second largest energy source in the world by 2040,” he said.

Panelists also discussed the ability of natural gas use to improve energy efficiency and control emissions. Petrobras consultant Glenda Rangel highlighted the importance of companies putting greater focus on sustainability. “We have to develop integrated energy and emission management tools,” he said.

Glenda also commented on how carbon pricing will affect all industries, bringing challenges to various companies. “It is possible that carbon has cost, which will make the management of energy efficiency very important at this new time in the sector,” he said.

Upcoming Election

Brazil’s approaching presidential election, which is set for Oct. 7, was also among the topics discussed given its role in the future of the country’s energy sector. To some leaders in the industry, Brazil has made great progress over the past two years in terms of regulation, predictability and business stability.

Brazil’s Ministry of Mines and Energy (MME) Secretary of Petroleum, Natural Gas and Biofuels João Vicente Vieira stressed that dialogue between Brazil’s government and the oil industry has benefited the country, and he expects the next administration to continue to advance the existing regulatory framework agenda.

Vieira warned that regulatory stability is fundamental to attract investment from energy companies. “The industry will always seek the best place to invest. If we do not have regulatory stability, they will move the investment elsewhere,” he said.

Regarding environmental licensing, the secretary defended the need for a simple and predictable process.

For MME Deputy Secretary Márcio Felix, regulatory reforms implemented over the last two years have helped raise 21 billion reais (roughly US$5 billion) in signature bonuses from oil and gas auctions. He believes that this trend has potential to continue no matter who wins the election.

“I believe in common sense. I don’t think Congress will make big changes,” Felix said. He added that Brazilian state-owned Petrobras is stronger and more structured than before the reforms. For years, Petrobras has been struggling to overcome its giant debt.

The conference was closed by Brazil President Michel Temer, who is leaving office in December 2018. He stressed that since Brazil opened offshore to international oil and gas exploration, development and production, the country has attracted not only investment but also technology. “Brazilian reforms reassured investors, and I can see this optimism with this new Brazil here. We will not allow the country and the [oil and gas] industry to go back to the 20th century,” Temer said, referring to the outcome of the elections.

Rio Oil & Gas 2018 attracted more than 40,000 visitors during the four-day event, according to the conference organizer. IBP president José Firmo emphasized that investments made in Brazil could create 400,000 new jobs and more than R$160 billion in annual revenues. “We will keep engaged to show the relevance and positive impact of our industry,” he said. “We must take advantage of the window of opportunity to convert reserves into wealth at this moment of transformation.”