The Brazilian Finance Minister is confident that Brazil will become an oil super power in the next ten years as projections show that the country will have crude for half a century and will become a top ten oil exporter and an important player in international geopolitics.
Finance Minister Edison stated that production of 3.6 million barrels a day is possible by 2017, with domestic demand anticipated at 2.6 million barrels a day, leaving a possible export of 1 million (barrels a day)”. President Lula da Silva also maintains that the country plans to invest heavily in the petrochemical sector so it can sell oil derivatives and not just unrefined crude.
Petrobras, the country’s leading manager of oil and gas exploration, has grown exponentially in the last 12 months in the wake of the continued oil finds. A recent survey by Ernst & Young ranked it as the worlds eighth biggest company in market value.
In 2008 Petrobras was valued at a highly-respectable $95.9 billion, placing it in 37th place in the global arena. However, the recent finds, coupled with major technology advances, have caused market value to almost double to $164.8 billion.
Yet another find was announced this month in Brazil’s Santos Basin. The find was made following the drilling of a fourth well in the BM-S-9 block off the south-eastern coast. This provided more good news for Petrobras as well as the British Gas group and Spanish-owned Repsol, who are working in conjunction with Petrobras to drill the block.
This was the second find in less than a week in the Santos region and adds to the previous deposit that holds the equivalent of 1.2 to 2bn barrels of recoverable oil and gas. A company statement did not say how much larger the new discovery would make the reserves.
Sergio Gabrielli, Petrobas CEO said Petrobas will now concentrate its investment strategy, purely in its domestic market, as its primary role is to develop and extract the recently found offshore oil deposits.
President Lula da Silva’s plan to increase control over the energy industry through regulation is currently being debated by the Brazilian congress. The Governments proposal is that Petrobas will have the dominant role in all matters with regard to the petroleum industry in Brazil.
The proposal would give Petrobras operator status for all Brazil’s oil and gas finds as well as becoming the commercial outlet for all domestic and international oil derivative sales. Under the proposal a new state-owned company would also be created to manage the governments oil and gas assets. This new company, Petrosal, could eventually grow larger than Petrobras according to analysts.
The latest developments in the petroleum sector have provided a huge boost to Brazils prospects of becoming a leading oil producer. We are in a fantastic moment, Jose Sergio Gabrielli, Petrobras chief executive, said on Monday.
This article was written by Ginny Naish the Marketing Director of Property Dreams Brazil, a Brazilian real estate consultancy based in Joao Pessoa, Paraiba. Property Dreams Brazil can provide consultancy services with regard to property investment, land acquisition, re-location and real estate marketing. Please visit Property Dreams Brazil for more information.
