Rapid growth is projected in the Brazilian oil industry leading to a major trickle-down effect across the nation. As the wealth generated by the industry spreads throughout the economy it is expected to give the already-booming Brazilian real estate industry a huge boost.
By 2014 Brazil is set to be one of the worlds oil superpowers and based on current projections, it has sufficient crude oil reserves to export for at least the next half a century. This will underpin the BRIC nations evolution into a leading world political player
The Finance Minister went on to say that Brazil will be producing 3.6 million barrels a day by 2017. Domestic demand in Brazil is projected at 2.6 million barrels, which would leave Brazil with a substantial surplus for export. The Government is also planning to invest in the petrochemical arena so that oil derivatives can be sold and not just crude.
Much of Brazil’s oil and gas production is managed by the Brazilian Government-owned company, Petrobas . A recent Ernst & Young survey rated the company the worlds eighth biggest global company in market value.
As little as a year ago, Petrobras market value was 95.9 billion US dollars, a respectable 37th place. Oil finds and advances in technology have seen the market value surge to 164.8 billion US dollars to the eighth place in the ranking of the worlds biggest corporations.
The discovery of another huge oil find this September in Brazils Santos Basin, Petrobas in conjunction with the United Kingdoms BG Group and Spain’s Repsol was the result of a fourth well was drilled in the BM-S-9 block off the country’s south-eastern coast.
This was not the only find that week in the region, as a previous deposit discovered just a few days earlier is believed to hold between 1.2 and 2 billion barrels of oil and gas. Exact figures on how far the new discovery will extend existing reserves are yet to be announced.
Petrobras CEO Jose Sergio Gabrielli said that the company will no longer invest overseas as the company will concentrate on its primary role to develop all of the recently discovered offshore oil reserves.
The Brazilian Congress is currently debating President Lula da Silva’s plan to increase control over the energy industry through regulation. His administration proposes assigning the dominant role in the nations petroleum industry to state-controlled Petrobras.
The Government will give Petrobas operator status for all the oil and gas finds and will serve as the commercial outlet for sales of all oil derivatives, both domestic and international. There are also plans to create another state-owned company called, Petrosal, to manage the Governments oil and gas assets. Analysts predict that this company could eventually grow larger than Petrobas.
Speaking this week, Petrobras CEO, Jose Sergio Gabrielli announced We are in a fantastic moment. Brazil is cementing its future as a leading oil superpower and the positive effects will be felt throughout the Brazilian economy.
