RIO DE JANEIRO – Brazil’s Attorney General’s Office has filed a lawsuit aimed at canceling the non-conventional-gas concessions that were awarded in an auction earlier this week, officials said.
The AG’s office said Friday that if the attempt to cancel the contracts does not prosper it will sue to bar the use of a controversial method for extracting those gas reserves that is known as hydraulic fracturing, or fracking.
Banned in several countries due to the threat it poses to environment, that method involves pumping a pressurized fluid – usually composed of water, sand and chemicals – into low-permeability rocks to create a fracture in the rock layer and release pockets of the trapped fuel.
The AG’s office also asked Brazil’s ANP energy regulator not to hold any more auctions of shale and other non-conventional-gas concessions until more thorough studies are carried out into fracking’s impact on the environment and human health.
A total of 240 exploratory gas blocks located in five onshore basins were on offer in Thursday’s auction, although, due to low interest from major multinational energy companies, only 72 concessions were awarded.
Most of the interest came from Brazilian state-controlled energy giant Petrobras, which – either alone or as part of a consortium – acquired 49 of the blocks, the ANP said.
The regulator raised 165.9 million reais (some $75.4 million), far below the minimum of 2.2 billion reais (some $1 billion) in revenue that the ANP hoped to generate from the auction.
The areas auctioned Thursday received little interest, due, among other reasons, to the fact they are onshore blocks located in remote and little-explored regions.
The lack of complete rules in Brazil governing fracking also may have dampened interest in the blocks from multinational energy companies.
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