Brazil will become the next major energy player
Brazil is already energy independent, a feat few major industrialize nations can boast. Its production of ethanol is the standard bearer for alternative energy sources. To further show Brazil’s energy evolution, recently Petrobras (Brazilian National Oil Company) announced in conjunction with General Electric Co.’s oil and gas division the signing of a 1.1 billion dollar deal to provide offshore drilling equipment.
This deal was a follow-up to an earlier agreement between the parties some three years ago for GE to provide $250 million worth of subsea wellheads to Petrobras. This equipment which is planned for installation in Brazil’s offshore oil and gas fields is being fabricated at GE’s Jandira plant in Sao Paulo.
Some of the largest offshore oil finds in recent decades were discovered off of Brazil’s southeastern coast in formerly hard to reach deep waters. Estimates range from 50 to 65 billion barrels of producible oil being in place in these extraordinarily large deep sea reservoirs. In 2013, the 11th round of auctions for oil exploration rights in Brazil will be held. The proposed 174 blocks to be offered for exploration are mostly located on land and further highlights Brazil’s emergence as a major player in the world oil and gas markets in the future.
Brazil’s Energy Minister, Edison Loboa recently announced that the Brazilian Congress has passed new royalty laws which reformed the way lucrative oil royalties are divided among the states. This has paved the way for the development of Brazil’s oil and gas resources. Over the last five years, there has been a concerted effort to increase the government’s power over energy and energy policy. This has delayed the development of Brazil’s resources and delayed or eliminated block auctions for foreign and independent Brazilian oil companies to guarantee long-term exploration and production investments in the country.
Also, it is hoped that 2013 will hold a second round of auctions for explorations rights in the subsalt fields located in the deep waters of Brazil’s southeast coast. Brazil’s subsalt has turned up some of the biggest deep water oil finds in history but they are considered technically difficult to abstract.
The next twenty years will see a major restructuring of the world energy market with Brazil at the fore front of this changing world. The deep sea production technology required to produce the subsalt reserves offshore in southeastern Brazil will be the road map for other deep sea production in the Western hemisphere. Less dependency on Middle Eastern oil will not only stabilize the world oil and gas market but will have wide ranging political impacts on the United States.
