El Paso to Start Exploration Drilling in Northeastern Blocks

US energy company El Paso (NYSE: EP) plans to start drilling exploration wells this year in the northeastern Camamu-Almada and Potiguar basins in northeastern Brazil, a company spokesperson told BNamericas.

The company is hopeful of registering oil and natural gas finds since the blocks are located close to existing productive fields, local press reported.

"Only when the results of this drilling campaign are analyzed will the company be able to determine how much it will invest to develop the finds," the spokesperson said.

El Paso has interests in 15 exploration blocks in Brazil in which it has invested US$450mn since 1999, the spokesperson said, confirming local press reports.

Increasing demand for natural gas in the northeastern region of the country has been the main stimulus for the company to invest in Brazil since lack of supply is restricting demand for the fuel.

The company expects to find fields with production potential as large as the 6 million cubic meters a day (Mm3/d) expected from the Manati field in the Camamu-Almada basin being developed by Brazilian oil company Queiroz Galvao, newspaper Diario do Comercio e Industria reported.

In the Potiguar basin the company will continue to invest with its partner, Brazil's federal energy company Petrobras (NYSE: PBR), in the development of the Arabaiana and Pescada fields, the spokesperson said. El Paso has a 35% interest in each field and Petrobras has 65%.

The company will also continue exploration continues in the BM POT 11 and BM POT 13 blocks which Petrobras operates.

About Business News Americas: Business News Americas is a multilingual news and business information service that covers the most important original stories in 11 different business sectors throughout Latin America everyday. Visit BNamericas to access our real-time news reports, 7-year archive, Fact File company database, and latest research reports. Click here for a Free two week trial to our Latin America Oil & Gas information service.