Petrobras to Invest Some $300M to Drill Two Potiguar Basin Wells - Exec

Brazilian state-run oil group Petrobras plans to invest around $300 million to drill two exploratory wells in the deep waters of the Potiguar Basin after environmental licenses were issued last week, a top executive said in an interview.

The license granted by environment agency Ibama on Friday was the first since 2013 for Petrobras to drill in the so-called equatorial margin, an extensive area in northern Brazil that is seen a new great frontier for oil and gas exploration.

"The rig arrived in Rio de Janeiro today to get the hull cleaned, which could take two to four weeks, and after that we will move it there for drilling," Chief Exploration and Production Officer Joelson Falcao Mendes said late on Monday. 

The first well, named Pitu Oeste, will be drilled 52 km (32.3 miles) from the coast in block BM-POT-17, with operations planned to start between October and November. The second, Anhanga, will be drilled nearby on the coast of Rio Grande do Norte state.

Mendes said the estimated investments were based on an average and would depend on the actual duration of the drills, both of which are expected to take around four to five months to complete.

The company is planning on obtaining more geological information about the Potiguar Basin so it can assess the economic viability and the extent of an oil discovery made in 2013 in the Pitu well.

The approval for Petrobras to drill in the area came as the oil giant also bids to drill at the mouth of the Amazon river on the coast of northern Amapa state, a controversial topic that has divided President Luiz Inacio Lula da Silva's own coalition.

Some cabinet ministers support Petrobras' attempt to drill the well, also located in Brazil's equatorial margin, but environmentalists have spoken against it as the area is seen as environmentally sensitive.

Ibama has previously rejected Petrobras' request, citing discrepancies in environmental studies, but the oil giant has appealed the decision.

Mendes said that Petrobras hopes Ibama will soon clear it to carry out a spill drill, which would be a final step before the license is granted.

"Our expectation is that maybe even before we can finish the first well in Potiguar, Ibama will signal the possibility of us moving the rig there (to Amapa) so we can carry that out," the executive said.

"We understand that we've met all the technical requirements, that all the final doubts that Ibama had we were able to solve, so we do not see any technical reason why we should not be granted authorization to carry out the simulated oil spill there", Mendes added.


(Reuters - Reporting by Marta Nogueira; Editing by Jan Harvey)

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