Energyboardroom.com Releases New ‘Inside Oil and Gas’ Brazil report
01.07.2014 / Energyboardroom
EnergyBoardroom’s new ‘Inside oil and gas’ report on Brazil, available today for free download, weighs up the current risks and rewards of investing in the Brazilian oil and gas sector, given the country’s recent economic slowdown, and the incentives on offer for companies willing to bet on brighter times ahead.
As the World Cup continues, with few of the problems emerging that were predicted in the build-up to it, economists continue to be pessimistic about Brazil’s growth, with the latest figures from Brasilia showing only 1.1 percent GDP growth forecast for 2014. It seems to many as if Brazil’s great boom of the early 2000s is finally over. However, in the oil and gas industry, there are still those who believe that investment in Brazil is still the right choice. “I truly believe that Brazil is one of the best countries in the world to invest today given the size of the country and its population, the pace of its economic development, and the size of the opportunities both offshore and onshore,” says Milton Costa, executive secretary of the Brazilian Petroleum Gas and Biofuels Institute (IBP).
According to Almir Barbassa, the CFO of Petrobras, there is still a lot of room for the NOC to grow, and a lot of investments to be made: “Today we are working to develop the existing fields,” he explains.
Petrobras is installing more than 30 oil rigs between 2013 and 2018. Most of the capex needed to build this equipment has already been deployed – not only the USD 42 billion for the transfer of rights, but the development of 20 FPSOs, each costing USD 1.5-1.8 billion. If we include the cost of adding wells to the FPSOs, each module requires USD 5-6 billion before starting production. We are paying for future production today.
With this amount being spent on developing the future of Brazil’s offshore assets, it seems that perhaps, despite the slowdown of the economy, there are still some interesting times ahead for the oil and gas sector, and those companies choosing to do business in it.
In this environment, the Brazilian oil and gas industry is attempting to push forward its development. Speeding up integration of new ideas and concepts into the Brazilian oil and gas industry is one way that policy makers are expediting the industry reshuffle that will allow best use of hydrocarbon resources across the country. There is an imperative to gain the skills that Brazilian industry can use to ease access to resources. Lowering costs and in- creasing capabilities must be married with the Brazilian government’s desire to increase the capabilities of local industries through use of local content regulation (LCR).
João Carlos de Luca & Milton Costa, President & Executive Secretary – IBP
Almir Barbassa, CFO – Petrobras
Renato Bertani, CEO – Barra Energia
Marcos Assayag, former Executive Manager – CENPES
José Maria Moreno, CEO – Repsol Sinopec
Antonio Augusto de Queiroz Galvao, Chairman – Queiroz Galvao
Nilo Chagas de Azambuja Filho, CEO – HRT
Nelson Leite, President – FMC Technologies do Brasil
Stephane Dezaunay, Country Manager – PGS
Luiz Braga, Ph.D, VP – Geomarket Director, Latin America – CGG
Ronaldo M. De Oliveira, Commercial Director – CBO
João Ferraz, CEO – Sete Brasil
Renata Pereira, Executive Director – BRASCO