Business | Oil & Gas
Brazil becoming key source for new crude
Brazil's growing oil output and prospecting are turning it into a key source of new crude in the Western Hemisphere, but whether this will bring a tangible increase in exports remains to be seen.
- Reuters
- Published: 23:03 July 28, 2007
Rio De Janeiro: Brazil's growing oil output and prospecting are turning it into a key source of new crude in the Western Hemisphere, but whether this will bring a tangible increase in exports remains to be seen.
Analysts say any serious increase in petroleum exports would depend on economic growth in Latin America's largest country, now picking up steam after years of stagnation and crises. Brazil achieved self-sufficiency in crude last year and is slowly growing as a net exporter.
"If Brazil really starts growing at higher rates, maintaining self-sufficiency may become quite a challenge, and that is clearly the government's priority," said Francois Moreau, head of Estrategia e Valor consultancy in Rio.
Brazil's state oil company, Petrobras, projects its crude output in Brazil should reach 2.37 million barrels per day in 2011, up a steep 27 per cent from this year's planned 1.86 million bpd, and then rise to 2.81 million bpd by 2015.
Meanwhile, the central bank expects the economy to expand 4.7 per cent this year after a 3.7 per cent rise in 2006. The government wants growth of 5 per cent or more in the years to come.
Experts say that would require yearly oil and fuels output to rise by more than 5 per cent, so Petrobras' ambitious output growth plan is just about enough to meet that demand.
In the first quarter, Petrobras' exports of oil and fuels exceeded imports by 187,000 bpd, a 156 per cent rise from a year earlier.
Imports of lighter crude are needed to mix with heavy local oil at the refineries, but Brazil has been upgrading factories to process more local petroleum.
In the meantime, planned start-up of shallow-water Polvo field by US company Devon Energy Corp in the next few days is about to open a new stage of oil expansion in Brazil, making the company the first foreign producer not associated with Petrobras.
Analysts say high world oil prices, new technologies and Brazil's economic and political stability have pushed the country from a second-tier oil province a few years ago into a booming producer with strong prospects.
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