Spectrum Geo exec on Brazil’s potential for new finds

What is Spectrum Geo’s role in Brazil’s upstream sector?
I think Spectrum’s role in the country is kind of like a government partner because, at our own risk, we open windows of knowledge that allow Brazil to expand and extend its possibilities, hence attracting investment. On top of that, we also have a huge team of sales agents selling Brazil’s offshore opportunities to companies based in Europe, Asia and North America.
As a company, we try to find areas where we don’t have data or where the data is too old. We aim to increase the value of the region, and we do this with our own investment. There is no governmental investment involved. This represents a huge risk for Spectrum.
In the past, this was done by Petrobras, when the company had a monopoly on the entire value chain. Petrobras used to acquire new exclusive data to perform exploration works and enhance the petroleum map of the country. However, Petrobras doesn’t play this role anymore.

What kinds of data are you allowed to acquire in Brazil?
Based on the Brazilian regulation, there are two types of data one can acquire: exclusive and non-exclusive. The exclusive data comes when bidding for a block. Once you win the tender, you need to do certain studies and research that will lead you to exclusive data. This data has five years of confidentiality.
On the other hand, when you are not an operator, you can also do your own research. You can apply to the ANP [National Agency of Petroleum, Natural Gas and Biofuels], receive their authorisation to do a study in a region and acquire the data. This data is multi-client and does not belong to you, nor to anyone. The data belongs to the government, to the Brazilian state and to the company holding the ANP’s authorisation. This company has the right to negotiate this data over 10 years, and then we have 10 years of exclusivity to sell the data several times to several clients.

Does the ANP commercialise this data as well?
No, it doesn’t. When granted ANP authorisation, you are obliged to deliver one copy of this data to the ANP. The areas granted are the new frontier, which means areas where no concessions have been awarded yet. When receiving this copy of the data, the ANP studies it, makes its evaluation of the potential and consequently offers the areas in bid rounds.
Spectrum Geo is responsible for most of the areas that were offered by the ANP in previous rounds – the Foz do Amazonas area, Santos and Campos basins, Sergipe-Alagoas and others. We have covered almost all Brazilian offshore basins.

What investment opportunities are available in the Brazilian market?
I think Brazil has the first requisite necessary to have oil and gas business: the country’s geology. I am surprised by the untapped potential of Brazilian reservoirs. In a huge country such as this, you explore a new basin, discovering billions of barrels in a single reservoir. Then, when you thought it couldn’t get any better, you have a basin double that size, as happened with the Santos Basin, for instance. It was Spectrum that revealed those resources to the world.

Do you foresee any more major new discoveries being made?
I think in the next five years we will have some very important discoveries that will surprise us. In different basins such as Campos, Santos and Foz do Amazonas, we will see discoveries that will make the same impact as when Brazil discovered the pre-salt. We are talking about discoveries that can have a massive impact in the market. I hope that we have the intelligence to capitalise on these upcoming changes.

Considering current market dynamics, what areas hold the most significant growth opportunities?
In our field of activity, I believe growth is triggered by 3D surveys. We all see this big potential here in Brazil. The global trend is pushing in this direction, so 3D projects are a must. On top of this, if you consider the size of the market in Brazil, we are talking about 3D surveys of 50,000 square kilometres, which is huge.

For more information on seismic projects in Brazil, see our business intelligence platform, TOGYiN.
TOGYiN features profiles on companies and institutions active in Brazil’s oil and gas industry, and provides access to all our coverage and content, including our interviews with key players and industry leaders.
TOGY’s teams enjoy unparalleled boardroom access in 35 markets worldwide. TOGYiN members benefit from full access to that network, where they can directly connect with thousands of their peers.

Business intelligence and networking for executives: TOGYiN