N.Y. Times News Service
URUCU, Brazil - A solitary, yellow-tipped drilling rig emerging
from an endless horizon of green trees in Urucu is a sign that
Brazil has finally struck oil in the Amazon region.
An outpost of heliports, prefabricated dormitories and
air-conditioned offices has been built in the forest around the
first commercially viable oil and gas fields found in the Amazon
region since exploration began in 1917.
And at every step, Brazilian officials say they have taken great
care not to damage the rain forests or the environment.
After two years of production, volume is small - only 5,000
barrels of oil a day. But hopes are so high that the jungle fields
have become the largest destination for domestic investment by
Brazil's state oil company, Petroleos Brasileiros SA, or Petrobras.
``The crude is so light that we could put it directly in the
fuel tanks of the diesel trucks and jeeps,'' Arlindo Augusto Alves
Filho, a company operations official, said as he perspired under the
humid, 100-degree heat of in the camp, which is two degrees south of
By 1995, officials hope, Urucu oil wells will be pumping 20,000
barrels a day, enough to make the state of Amazonas, an area twice
the size of Texas, self-sufficient in oil. Currently, the 10,000
barrel-a-day refinery in Manaus, the state capital of 1.3 million
people, is supplied by tankers that churn up the Amazon River from
Atlantic Coast oilfields - a 10-day, 1,000-mile voyage.
Of equal interest are huge gas finds in Urucu and 100 miles to
the west, at Jurua. Recoverable volumes of both fields total 60
billion cubic meters, enough to supply Brazil's current gas needs
for 20 years.
The gas fields are 2,000 miles northwest of Brazil's major
consumption centers on the Atlantic coast.
So, Petrobras planners are studying two ways of reaching local
outlets: liquefying gas for shipping by tanker down the Solimoes
River to Manaus and building a 400-mile gas line across the western
Amazon region to supply Porto Velho.
In addition to making the Amazon region self-sufficient in gas,
the reserves permit construction of gas-fired plants to generate
electricity. Energy self-sufficiency has long been an elusive goal
for Brazil, which has the largest Latin American economy.
In 1953, an American geologist reported the Amazon region lacked
oil, and to prove him wrong, Brazil's government created a state
monopoly by reserving oil exploration and production for Petrobras.
But almost four decades after the streets of Rio de Janeiro rang
with the nationalist cry ``O petroleo e nosso'' - ``The oil is
ours'' - Brazil produces only half the 1.3 million barrels a day
that it needs. Drained of capital by politicians, the company
postponed in the late 1980s a self-sufficiency program and cut its
drilling rigs to 25 in 1989, from 79 in 1986.
Recently, the price of continued dependence on imports has
become critical for Brazil. Gyrating oil prices because of the
Persian Gulf crisis pushed Brazil's oil import bill up 14 percent in
September, to $512 million.
Unwilling to undermine a wider fight against inflation,
Brazilian President Fernando Collor de Mello has increased gasoline
prices five times since August, but not by enough to prevent the
state company from losing $13 million a day in recent weeks.
Tension over the price of imported oil blew up in public Oct. 19
when Petrobras President Luiz Octavio da Motta Veiga resigned,
charging angrily that the government was squeezing the company to
avoid a surge of inflation. His replacement, Eduardo Teixeira,
promised to cope with high oil prices by cutting costs.
Teixeira, a free-market economist, startled many Brazilians by
proposing a long-term solution: ending the company's monopoly, which
under Brazil's 1988 constitution encompasses exploration,
production, refining, importing and exporting. …