Brazilian Oil Industry to Underpin Real Estate Growth
Tuesday, October 13th, 2009
Brazils real estate market is set for huge growth in the wake of the country’s latest oil finds, as the positive effects of a thriving oil market are felt throughout the Brazilian economy.
The Brazilian Finance Minister is confident that Brazil will become an oil super power in the next ten years as projections show that the country will have crude for half a century and will become a top ten oil exporter and an important player in international geopolitics.
Finance Minister Edison stated that production of 3.6 million barrels a day is possible by 2017, with domestic demand anticipated at 2.6 million barrels a day, leaving a possible export of 1 million (barrels a day)”. President Lula da Silva also maintains that the country plans to invest heavily in the petrochemical sector so it can sell oil derivatives and not just unrefined crude.
The Government owned company, Petrobas, is responsible for the management and exploration of oil and gas in the country. The company has been recently ranked eighth in the world by market value by the leading accountants, Ernst & Young.
In 2008 Petrobras was valued at a highly-respectable $95.9 billion, placing it in 37th place in the global arena. However, the recent finds, coupled with major technology advances, have caused market value to almost double to $164.8 billion.
Yet another find was announced this month in Brazil’s Santos Basin. The find was made following the drilling of a fourth well in the BM-S-9 block off the south-eastern coast. This provided more good news for Petrobras as well as the British Gas group and Spanish-owned Repsol, who are working in conjunction with Petrobras to drill the block.
A find the previous week in the same region is estimated to hold between 1.2 billion to 2 billion barrels of oil and gas, although no projections are available with regard to the new find.
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.
President Lula da Silva’s plan to increase control over the energy industry through regulation is currently being debated by the Brazilian congress. The Governments proposal is that Petrobas will have the dominant role in all matters with regard to the petroleum industry in Brazil.
The company will be given operator status for all the finds and will also serve as the commercial outlet for the government’s oil take, refining the crude oil at several planned refineries for sale both here and abroad. A new state-owned company, Petrosal will be created to manage the government’s precious assets. Petrosal could eventually overshadow Petrobras, according to some analysts.
Petrobras chief executive, Jose Sergio Gabrielli said this further boosts Brazils chances of becoming a leading producer of oil and We are in a fantastic moment.
