Brazil and potential operators are in talks on how to fund the country's first pilot shale drilling projects under the Transparent Well program, a senior government official told S&P Global Platts.
Companies would like to develop these pilot wells using government research and development funding, Marcio Felix, Brazil's secretary for oil, gas and biofuels, said on the sidelines of Offshore Technology Conference 2019 in Houston.
"This is a business, it is a pilot project, and it has to be cost efficient," Felix said.
Brazil has not drilled any shale wells under the program, which aims to overcome social and environmental concerns about hydraulic fracturing.
The previous administration of President Michel Temer envisioned the program and expected the first pilot wells to begin operating in the first half of 2019.
The initiative will allow the public and state regulators to access real-time data on the project's water and air quality, drilling, fracking information, local employment and more, helping states weigh the benefits and risks of fracking.
For the administration of President Jair Bolsonaro, who took power on January 1, shale gas could be part of plans to develop Brazil's natural gas market, Felix said.
Felix said there are plans to drill at least one gas and one oil shale well under the program. These could be drilled in the Reconcavo or Parnaiba basins, he added.
UP TO 288 TCF IN POTENTIAL GAS RESERVES SEEN
Currently, the National Petroleum Agency (ANP) put Brazil's shale gas reserves at 288 Tcf, excluding 226 Tcf in the Parana Basin which the regulator does not account for due to a basalt barrier blocking access to the reserves.
Previously, Brazilian onshore operator Eneva told Platts that due to the low level of pipelines across the country, gas produced by shale projects could be used in gas-to-power projects.
Brazil tried to kick-start shale exploration after awarding several blocks with unconventional oil and gas potential in 2013 despite uncertainties about how fracking would be regulated, creating public opposition.
Public prosecutors in several states filed lawsuits that blocked the use of techniques such as fracking and horizontal drilling.
Environmental groups and independent federal prosecutors have balked at participating in the Transparent Well program, preferring to continue to file lawsuits blocking fracking.
