Petrobras Burning Off $250 Million Worth Of Gas Per Annum

Petroleo Brasileiro, Brazil's state controlled oil company, is burning off about $250 million of natural gas a year because it has no way of bringing it to market, the Jornal do Brasil daily newspaper has said.

Petrobras is wasting the gas at rate of more than eight million cubic meters a day, burning it off atop offshore oil platforms near Rio de Janeiro, the paper said, citing Brazil's National Petroleum Agency, or ANP. The gas is extracted along with crude oil, and gas waste has increased along with a rise in oil output.

ANP, considers the loss “unacceptable” and has been collecting royalties on the lost resources, Jornal do Brasil said. The gas, which would sell for about $2.09 a British thermal unit, would also compete with gas that Petrobras is required to buy from Bolivia for $3.04 per BTU.

Brazil rationed energy for eight months ending in February after electricity demand outstripped the construction of capacity and drought failed to refill hydroelectric reservoirs drawn down to meet rising demand.

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