Brazil’s oil and gas industry

Business Monitor expects Brazil’s crude production to rebound from its 2012 fall and flat line in 2014. Also, they have reported that in the future, Petrobras’ colossal presalt development plan will support the upward trend. Fields such as Lula, Iracema and Franco will most likely boost crude output above 4 million bpd by 2020. Business Monitor also believe that there is a risk that Brazil will become increasingly dependent on LNG imports in the coming years, as large international sporting events will require the country to leverage it gas power generation capacity.

Key trends

• Only 11 companies agreed to pay the US$ 1 million fee required to place bids on the Libra field auction in November 2013.
• Business Monitor maintains their long term bullish outlook for Brazil’s crude production.
• Expect oil production to keep growing throughout the forecast period, from 2.2 million bpd in 2013 to more than 4 million bpd after 2020.
• Country’s timely resource development is likely to face delays.
• Petrobras is seeking to implement an extensive reform agenda as a part of its US$ 236.5 billion strategic plan for 2012 – 2016.
• The fuel pricing regime in Brazil has improved considerably since June 2012 as Petrobras and the government have allowed fuel prices to increase substantially.
• Rapid economic growth will continue to push domestic oil consumption higher, though the country’s unique ability to alternate between ethanol and gasoline consumption in the transport sector makes forecasting difficult.
• Oil demand is expected to rise rapidly.
• Total oil consumption is to rise from 2.74 million bpd in 2023 to 3.07 million bpd by 2017 and 3.50 million bpd by 2022.
• Business Monitor forecast an over 40% increase in refinery capacity through 2016.
• Petrobras will continue to purchase refined fuel products on the international market and sell them for a loss domestically.

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