Rebeca Duran

Rebeca Duran

Staff Writer
The Brazil Business


Oil Industry in Brazil

Rebeca Duran

Rebeca Duran

Staff Writer
The Brazil Business


It’s not news that the oil and gas sector is expanding in Brazil. Newspapers and magazines publish daily articles about the developments and investments in this industry, as well as, the need for a qualified workforce. Oil gained tremendous importance in the world during the XX century, when most nations became dependent on it as a source of energy.

Oil was discovered in 1930, in Bahia, Brazil. In 1968, the first project was developed for extracting oil offshore (out of the land, in deep waters) and six years later the biggest Brazilian oil basin was finally found in Rio de Janeiro, the Bacia de Campos.

As time passed by, Brazil became one of the only countries to dominate offshore oil extraction and nowadays the country occupies the 16º position in the world rank of countries with the largest oil reservoirs. The discovery of new basins and the end of the state monopoly over oil exploration established a new era for this industry in Brazil.

The Importance of Oil to Brazil

In Brazil, ensuring ownership of oil fields by the Union and the domain of maritime exploration technology have always been seen as powerful and strategic tools for national development. The variety of activities in the oil production comprises many others sectors and, therefore, results in the development of them and in the generation of jobs and income. This makes the oil industry a great contributor to the expansion and balance of the economy.

Under the Brazilian perspective, the industry is one of the most economically important, as well as the most strategic and technologically advanced. That’s why the Brazilian government created economic policies that ensure that many of the goods and services that are demanded by this sector are provided by companies located in Brazil.

Brazilian Oil Imports in Barrels

Month 2010 2011 2012 2013
January 7,991,987 6,436,554 9,451,622 10,681,060
February 11,129,992 11,707,811 6,053,356 9,562,814
March 11,134,698 11,748,781 8,615,162 10,671,558
April 11,980,744 13,616,415 12,709,160 11,501,267
May 9,937,681 11,500,349 9,760,269 14,975,077
June 11,462,059 10,589,444 14,247,654 8,765,787
July 14,852,250 6,453,578 11,759,157 28,317,365
August 6,757,802 8,911,900 4,276,558 6,242,997
September 11,123,903 9,065,276 9,042,617 7,595,188
October 8,172,393 12,148,081 3,567,839 19,247,027
November 10,268,299 11,165,844 13,796,647 8,641,972
December 8,836,829 7,928,899 10,667,803 -
Total of the Year 123,648,637 121,272,932 113,947,844 136,202,112

Brazilian Oil Exports in Barrels

Month 2010 2011 2012 2013
January 14,901,306 14,425,363 15,335,605 5,149,399
February 17,722,562 19,791,040 16,557,773 10,804,260
March 22,107,204 13,172,473 20,162,695 12,855,474
April 18,024,790 15,530,098 19,854,925 7,129,795
May 23,201,172 24,855,510 16,162,271 12,227,079
June 17,534,809 17,485,646 10,486,996 8,133,389
July 10,525,316 19,855,800 14,686,338 8,132,139
August 21,046,065 23,205,179 25,171,092 11,819,915
September 18,481,179 15,093,831 15,475,897 16,170,106
October 10,202,197 17,297,804 8,075,396 10,363,772
November 18,421,435 15,099,624 15,449,535 16,882,839
December 38,324,014 24,836,372 23,109,511 -
Total of the Year 230,492,050 220,648,740 200,528,035 119,668,166

Investments on the Sector

The main socio-economic impact of oil extraction is the major investment necessary ​​to facilitate their production. Especially when it comes to deep water fields, as is the case in Brazil.This fact was taken into consideration by the International Energy Agency (IEA) in their 2013 annual report, in which they projected Brazil and the United States as the main actors of the international energy market due to recent discoveries of new fossil fuels.

The Agency informed that Brazil can be responsible for an increase of one-third in the global oil production until 2035, since the country provides investments and technological development for the sector. The IEA report also pointed out that an important part of the investment designated for the oil exploration in Brazil should derive from Petrobrás, since its operation in the development of strategic areas increases their responsibility in the implementation of its investment program.

The Brazilian Golden Egg

The IEA estimates shows that the Brazilian production, of approximately 2 million barrels per day, can achieve 6 million barrels per day in 2035. But how's that possible? How can Brazil grow that much in less than 30 years? That’s a question that can be answered with one sentence: the discovery of the Pré-Sal layer.

The Pré-sal layer was discovered 5,000 meters under the seabed in the Brazilian coast. The layer is so large that extends for 800 km in length between the states of Espírito Santo and Santa Catarina. Pré-sal was considered the largest oil province found in the world within the last 30 years .

The entire length of Pré-sal contains, approximately, the equivalent of 1.6 trillion cubic meters of gas and oil. This number exceeds by more than five times the current oil reserves in Brazil. With this discovery and proper investment and development, Brazil can achieve the estimatives of IEA.

Need of Qualified Professionals

According to a research organized by BBC Brazil with the General Immigration Office of Brazil (CGIg), shows that 49,801 foreign professionals entered in Brazil between 2010 and 2012 to work in the oil and gas industry. The Ministry of Labor informs that 25% of the total amount of temporary work visas issued for foreigners in Brazil were designated to professionals for the oil industries.

But what are all these foreigners doing in Brazil? Basically these workers are subjected to infrastructure, which means, for the exploitation and refine of oil and gas. The workers are requested for the development of platforms and pipelines systems. Others are requested in the naval engineering for the construction and maintenance of ships for oil and gas transportation and prospection.

Research activities are also a field in which foreign professionals are hired to work. Their function is to identify potential exploitation fields and now, with Pré-sal the research activity gained even larger importance. Brazil still needs to develop a technology to perforate the depth of more than 2,000 meters in which Pré-sal is located.

Perspectives for the Future

The exploration of ​​Pré-sal must place the Brazilian oil industry as one of the ten largest producers worldwide. The deposits discovered on the coasts of the states of São Paulo and Rio de Janeiro must concede to the country a revenue of 28 billion USD derived from oil exports in 2020.

Petrobrás plans to invest $53.4 billion USD in Pré-sal for the period between 2011 and 2015. With these values​​, the participation of the Brazilian Pré-sal oil production should increase from the current 2% to 18% in 2015.