October 11, 2017 / 5:21 PM / a year ago

Brazil to ramp up oil production before 'renewable era' hits: official

SAO PAULO (Reuters) - Brazil plans to boost oil exploration and production to seize on its reserves before the world enters the “renewable era” and other technologies hurt demand for the fossil fuel, Deputy Energy Minister Paulo Pedrosa told Reuters on Wednesday.

Brazil's state-run oil company Petrobras LPG fuelling stations are seen in the Guanabara bay in Rio de Janeiro, Brazil October 7, 2017. REUTERS/Pilar Olivares

“The stone age did not end for lack of stone, and the oil age will not end for lack of oil,” Pedrosa said in an interview.

“A race has begun to take advantage of the resource, because in the future it might not have value.”

Since 2006, Brazil has discovered potentially massive stores of oil and gas trapped below a layer of salt under the ocean floor off its coast, but slumping global oil prices have complicated efforts to exploit these reserves.

Pedrosa said the Organization of Petroleum Exporting Countries (OPEC), which has cut output to reduce a global crude glut and support prices, should not expect Brazil to help control the global oil supply.

OPEC’s chief said Tuesday the cartel was meeting with the United States and reaching out to other countries in an effort to restrict global supplies and combat low prices.

“There was a time when there was concern in the sense that this wealth must be exploited carefully, so that the next generation could take advantage of it,” he said.

“Increasingly, it’s the opposite, we need to accelerate the use of this wealth.”

Pedrosa said he was not aware of any OPEC contact with Brazil regarding efforts to cut oil supply.

State-controlled Petroleo Brasileiro SA, which accounts for 94 percent of Brazilian oil production, is now a market-driven company and it does not make business sense for it to reduce supplies, nor is it in the country’s interests to force the oil company to do it, Pedrosa said.

Brazil has several rounds of bidding for new exploration areas planned each year through 2019 and is discussing two additional annual auctions in both 2020 and 2021.

Reporting by Luciano Costa, writing by Jake Spring; Editing by David Gregorio

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