Brazil Oil Regulator Denies Petrobras E&P Extensions

RIO DE JANEIRO (Dow Jones Newswires), Mar. 4, 2009

Brazil's National Petroleum Agency on Tuesday denied extensions to exploration concessions in four blocks held by Brazilian state-run energy giant Petrobras, the local Estado news agency reported Wednesday.

Discussion of the E&P licenses was on the board's agenda, but ANP officials couldn't confirm the decision when contacted by Dow Jones Newswires.

The ANP rejected extensions for the BM-PAMA-9 block in the Para-Maranhao Basin, the BM-POT-18 block in the Potiguar Basin, the BM-P-2 block in the Pelotas Basin and the BM-BAR-5 block in the Barreirinhas Basin, Estado reported.

In December, Petrobras asked the ANP to extend exploration terms for 70 blocks. So far, 27 blocks have received extensions of between 18 and 24 months. Extension requests for 43 blocks were rejected.

The ANP also granted Petrobras an additional 60 days to delineate the 25% share of the BM-ES-5 block in the Espirito Santo Basin that the company will return to regulators. In February, the ANP rejected a request by Petrobras to extend the third exploration phase of the block.

The oil company asked for the extension after it was unable to obtain environmental licensing to drill in the shallow-water region of the block, which is offshore from northern Espirito Santo state.

Petrobras is lead operator of the block with a 65% stake, while the Brazilian unit of El Paso Corp has a 35% stake. Last week, the two companies announced a pioneer well in the block found traces of gas after previously announcing a similar separate find in December.

The exploration portion of the block no longer encompasses rights to the Camarupim and Camarupim Norte fields, Petrobras told Dow Jones Newswires at the time. The two fields were declared commercially viable in December 2006 and September 2008, with production expected to start in the first half of 2009.  

Copyright (c) 2009 Dow Jones & Company, Inc.

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