By Brazil Stock Guide — Petrobras (B3: PETR3, PETR4; NYSE: PBR, PBR.A) sees exploration off the northern state of Amapá as a key part of its reserve-replacement strategy ahead of an expected peak in Brazil’s pre-salt production around 2034 or 2035.
CEO Magda Chambriard said opening new exploration frontiers will be necessary to prevent Brazil from losing its place among the world’s ten largest oil producers. The country currently ranks seventh.
“There is no future for an oil company without exploration,” Chambriard said at an event in Amapá attended by President Luiz Inácio Lula da Silva and Senate President Davi Alcolumbre, who also heads Brazil’s Congress.
According to Chambriard, roughly 80% of Brazil’s oil production currently comes from the pre-salt, underscoring the need to discover new resources capable of sustaining output over the coming decades.
The executive recalled that Brazil was once heavily dependent on imported oil. In 1984, she said, crude oil accounted for 48% of the country’s import bill. Brazil achieved oil self-sufficiency between 2006 and 2008 and, supported by the pre-salt, has made crude oil its largest export by value for the past two years.
“Losing that position would be a terrible setback,” she said. Chambriard expects oil to remain Brazil’s leading export product this year.
Against that backdrop, Petrobras confirmed an oil discovery in the BM-FZA-59 block off Amapá. The company, however, does not yet have enough information to estimate the size of the accumulation or determine whether it is commercially viable.
Drilling at the exploration well is expected to continue for another 15 to 20 days. Petrobras will then need to appraise and delineate the discovery to determine how much oil is present and what portion could be technically recovered.
“There is oil, and we have a discovery. What we do not yet know is how much,” Chambriard said. According to the CEO, the results obtained so far support earlier studies pointing to significant potential in the region.
Petrobras plans to drill three additional wells in BM-FZA-59 and is awaiting the necessary environmental approvals to move forward with the campaign. The company also plans to drill five wells in adjacent blocks.
Together, those wells should provide a clearer picture of the potential in the Amapá section of Brazil’s Equatorial Margin. The initial discovery alone does not constitute a commercial field and is not yet sufficient to support projections for production, capital expenditure or revenue.
“All indications are that the results will be positive. We are extremely optimistic about what we are finding here,” Chambriard said.
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