Brazil’s New Era of Opportunity
Brazil’s oil and gas sector is on the verge of its biggest transformation in decades, with unprecedented opportunities for new entrants to the market, according to new research by the Washington-based Atlantic Council.
This is in spite of the economic and political problems the country is currently facing, the international relations think tank said in its report Oil & Gas in Brazil: A New Silver Lining?
State-run Petrobras, still reeling from a major corruption scandal, has seen its debt soar, forcing it to cut investment, lower production forecasts and put assets up for sale in the last year. In January, Petrobras cut its 2016-2020 investment plan by 5% to $93bn. The indebted company had already slashed its investment plans to $98.4bn from $130.3bn.
At the same time, Petrobras made a 20% cut to its oil and gas reserves. The company has also undertaken an “aggressive plan to sell assets and focus its e orts on exploring reserves in the pre- salt layer,” the report said. The company, which for years dominated Brazil’s energy landscape, has never experienced such a “profound transformation,” it added.
However, the contraction of Petrobras and other traditional players leaves a gap for new companies that are keen to increase their role in Brazilian exploration and production, the Atlantic Council said. Indeed, it presents a “unique moment” for those companies interested in increasing their presence in Brazil, it added.
“Opportunities are now opening up for new companies that will work with Petrobras in future – we have never seen this before in Brazil,” commented Decio Oddone, the director of port services rm Prumo Logistica and ex-CEO of Petrobras Energia, the Argentine subsidiary, during a debate held by the think tank in Washington.
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