Oil Industry Will Play A Key Role For Future Property Growth In Brazil
With Brazil making the largest oil finds in the western hemisphere for the last 30 years, the wealth generated for the country will result in a huge redistribution of money, leading to sustained growth in the Brazilian property market.
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.
The Finance Minister went on to say that Brazil will be producing 3.6 million barrels a day by 2017. Domestic demand in Brazil is projected at 2.6 million barrels, which would leave Brazil with a substantial surplus for export. The Government is also planning to invest in the petrochemical arena so that oil derivatives can be sold and not just crude.
Much of Brazil’s oil and gas production is managed by the Brazilian Government-owned company, Petrobas . A recent Ernst & Young survey rated the company the worlds eighth biggest global company in market value.
With the recent huge finds and massive leaps forward in technology accomplished by Petrobas, its market value has risen from $95.9 billion just over a year ago 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.
This was not the only find that week in the region, as a previous deposit discovered just a few days earlier is believed to hold between 1.2 and 2 billion barrels of oil and gas. Exact figures on how far the new discovery will extend existing reserves are yet to be announced.
Sergio Gabrielli, Petrobas CEO said Petrobas will now concentrate its investment strategy, purely in its domestic market, as its primary role is to develop and extract the recently found offshore oil deposits.
The Brazilian Congress is currently debating President Lula da Silva’s plan to increase control over the energy industry through regulation. His administration proposes assigning the dominant role in the nations petroleum industry to state-controlled Petrobras.
The Government will give Petrobas operator status for all the oil and gas finds and will serve as the commercial outlet for sales of all oil derivatives, both domestic and international. There are also plans to create another state-owned company called, Petrosal, to manage the Governments oil and gas assets. Analysts predict that this company could eventually grow larger than Petrobas.
Speaking this week, Petrobras CEO, Jose Sergio Gabrielli announced We are in a fantastic moment. Brazil is cementing its future as a leading oil superpower and the positive effects will be felt throughout the Brazilian economy.