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Brazil's CVRD to explore natural gas with Shell
Reuters
SAO PAULO
Petroleumworld.com 09 13 07Brazilian mining giant CVRD (VALE5.SA: Quote, Profile , Research) (RIO.N: Quote, Profile , Research) said Wednesday it would team up with Royal Dutch Shell (RDSa.L: Quote, Profile , Research) to explore for natural gas to meet its growing energy needs.
CVRD, the world's largest producer and exporter of iron ore, said in a statement it had signed a memorandum of understanding with Shell Brasil Ltda. to study the possibility of participating in exploration blocks in the Espirito Santo basin, where Shell already has operations.
The company also said it is looking to acquire its own natural gas fields and plans to participate in an upcoming auction for exploration blocks held by Brazil's National Petroleum Agency.
CVRD, short for Companhia Vale do Rio Doce, is one of Brazil's biggest energy consumers. It consumes about 4.5 percent of all electricity in the country, 4 percent of natural gas, 20 percent of fuel oil and 3 percent of all diesel use.
The company, which had been rumored to be seeking out opportunities in natural gas for quite some time, stressed that it does not intend to become an oil and gas company.
"As a major energy consumer, CVRD is seeking to diversify and optimize its energy grid through increased use of thermal coal, renewable fuels and natural gas," the company said in a statement.
Brazil currently gets about half of its natural gas needs from Bolivia, but its investments in gas exploration and production there were suspended after Bolivian President Evo Morales nationalized the country's hydrocarbon reserves in May 2005, including assets of Brazil's state-run Petrobras.
Brazil has since been trying to boost domestic output and is planning to build between three and six regasification plants for imported liquefied natural gas in the coming years.
Reuters
September 12, 2007Copyright© 2007 Reuters. All rights reserved.
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