Brazil Oil and Gas Report Q1 2012
Business Monitor International, January 2012, Pages: 103
Business Monitor International's Brazil Oil and Gas Report provides industry professionals and strategists, corporate analysts, oil and gas associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Brazil's oil and gas industry.
BMI View:
The discovery of billions of barrels of oil in the so-called subsalt oil province offshore Brazil has been one of the most significant developments in the global oil industry for many years. Regulatory reforms under former president Luiz Inácio Lula da Silva place much of the onus for developing those reserves on state-run Petrobras, though foreign companies will also play an important role. BMI is more bearish on output growth than Petrobras, as it sees the possibility of production bottlenecks and delays to project execution as the company juggles a multitude of highly-complex multi-billion dollar projects. Nevertheless, crude production should grow rapidly over the coming years, with the country forecast to add nearly 2mn b/d of output by 2016 and nearly 3mn b/d by 2021. Rising ethanol production should push total liquids production to around 6mn b/d by 2021.
The main trends and developments BMI highlights for Brazil’s Oil and Gas sector are: .. In spite of Brazil’s bright production outlook, output disappointed to the downside in 2011. Oil production is estimated to have been 2.085mn barrels per day (b/d), a rise of just 31,000b/d on levels recorded in 2010, with ethanol and other liquids production putting overall output at about 2.8mn b/d.
.. While production disappointed in 2011, BMI remains bullish on the crude production growth outlook both over the short and long term. On the back of a number of major deepwater subsalt projects BMI sees major production increases in each of the next 10 years. In 2012, crude oil production is expected to rise about 180,000b/d, largely thanks to the Guara and Baleia Azul projects, to reach 2.25mn b/d, with ethanol production pushing total output to just over 3.02mn b/d. By 2016, BMI sees crude production hitting 3.9mn b/d, with total output at just over 4.8mn b/d, including ethanol.
.. Growth in production output will continue into the latter half of the decade and into the 2020s, as production levels at existing projects are ramped up and new projects come onstream. We see crude output surpassing 4mn b/d in 2017 and reaching 5mn b/d by 2021, with ethanol production putting total output at 5.265mn b/d and 6.06mn b/d in those years respectively. This remarkable production growth will make Brazil an increasingly important supplier to global oil markets over the coming decade.
.. Rapid economic growth will continue to push domestic oil consumption higher, thanks to the country’s unique ability to alternate between ethanol and gasoline consumption in the transport sector – based on short-term price movements. Oil consumption growth should remain largely in line with the levels recorded in recent years – at around 3% per year – although we anticipate that increased efficiency in the transport sector and in the wider economy will slow this rate to around 2% by the 2021. Total oil consumption is expected to rise from an estimated 2.810mn b/d in 2011 to 3.226mn b/d by 2016 and 3.579mn b/d by 2021
.. Rising fuels demand will see Brazil expand its refining base. We expect four new refineries (Rio Petrochemical, Abreu e Lima, Premium I and Premium II) to come onstream between 2012 and 2017, all of which will be operated by Petroleo Brasileiro (Petrobras). The new plants will see total refining capacity rise from around 2mn b/d in 2010 to around 3mn b/d by 2015 and 3.29mn b/d by 2018. Petrobras will spend over US$70bn on expanding the country’s refining base between 2011 and 2015.
.. While much of the focus, and investment, in the country’s hydrocarbons sector will be on the development of its oil resources, natural gas production is also expected to grow. The country’s somewhat modest gas production of 12.6bn cubic metres (bcm) in 2010 is anticpated to jump to 19.1bcm by 2012, at which point production growth is likely to flatten, rising steadily to 33.6bcm by 2019. There are a limited number of non-associated gas projects in the pipeline, and as a consequence most production growth will come from gas produced alongside new oil projects. The Amazonian Solimoes Basin is an area of potential production growth, though significant investment will be needed to link those reserves – located deep in the Amazon – with major population centres. The country is also thought to have sizable shale gas reserves, though this is not currently the focus of investment.
.. Relatively modest gas production combined with increased gas consumption in the industrial, residential and power sectors will mean that Brazil remains a net gas importer. Indeed, gas import requirements will hover at around 12-15bcm per year over the next decade. Brazil will continue to rely on pipeline imports from neighbouring Bolivia to meet the majority of its needs. However, liquefied natural gas (LNG) imports are likely to play an increasingly important role as Brazil expands its regasification capacity over the coming years. By 2013, Brazil is expected to have total LNG import capacity of 12.76bcm at three terminals. We do not forecast the country having to utilise all of this LNG capacity, though it will provide useful insurance against potential disruption to supplies from Bolivia.
.. State-run Petrobras is the undoubted champion of Brazil’s booming oil sector. With a US$224.7bn 2011-2015 capex programme aimed primarily at developing the Brazilian oil and gas industry, and a regulatory environment that enables it to maintain a privileged position in the sector – something that is unlikely to change. However, there is plenty of room for foreign players to operate grow. The biggest foreign players include Royal Dutch Shell (Q311 production of 51,138boe/d), Chevron (Q311 production of 41,494boe/d), BG Group (Q311 production of 16,982boe/d), and a Japanese consortium known as Frade Japao (Q311 production of 14,644boe/d). Foreign companies will undoubtedly look to expand through two hotly-anticipated licensing rounds, which are expected to take place in 2012.
BMI Industry View
SWOT Analysis
Brazil Oil and Gas SWOT
Global Energy Market Outlook
Table: Global Oil Consumption (000b/d), 2009-2016
Table: Global Oil Production (000b/d), 2009-2016
Regional Energy Market Outlook
Oil Supply And Demand
Table: Latin America Oil Consumption (000b/d), 2009-2016
Table: Latin America Oil Production (000b/d), 2009-2016
Oil: Downstream
Table: Latin America Oil Refining Capacity (000b/d), 2009-2016
Gas Supply And Demand
Table: Latin America Gas Consumption (bcm), 2009-2016
Table: Latin America Gas Production (bcm), 2009-2016
Liquefied Natural Gas
Table: Latin America LNG Exports (bcm), 2009-2016
Brazil Energy Market Overview
Table: Brazil – Upstream Projects Database
Industry Forecast Scenario
Table: Brazil’s Oil And Gas Sector – Historical Data And Forecasts, 2009-2016
Oil and Gas Reserves
Oil Supply and Demand
Biofuels Production
Gas Supply and Demand
Liquefied Natural Gas
Refining and Oil Products Trade
Revenues/Import Costs
Key Risks To BMI’s Forecast Scenario
Oil And Gas Infrastructure
Oil Refineries
Table: Refineries In Brazil
Service Stations
Oil Terminals/Ports
Oil Pipelines
LNG Terminals
Gas Pipelines
Regional and Country Risk/Reward Ratings
Latin America Region
Composite Scores
Table: Regional Composite Risk/Reward Ratings
Upstream Scores
Table: Regional Upstream Risk/Reward Ratings
Downstream Scores
Table: Regional Downstream Risk/Reward Ratings
Competitive Landscape
Executive Summary
Table: Key Players In Brazil’s Oil And Gas Sector
Overview/State Role
Licensing And Regulation
Licensing Rounds
International Energy Relations
Table: Key Upstream Players In Brazil’s Oil And Gas Sector
Table: Key Downstream Players In Brazil’s Oil And Gas Sector
Company Monitor
Petróleo Brasileiro
Shell Brasil
Repsol YPF Brasil
Esso Brasileira de Petróleo
Chevron Brasil
Ultrapar Participações (Grupo Ultra)
BG do Brasil
BP Brasil
Statoil do Brasil
OGX Brazil
Galp Energia – Summary
Eni – Summary
Mitsui – Summary
Devon Energy – Summary
Maersk Oil – Summary
Total – Summary
Cosan – Summary
Vale do Rio Doce – Summary
Anadarko Petroleum – Summary
Partex – Summary
Sonangol – Summary
Service Companies – Summary
Others – Summary
Appendix: Oil And Gas Long-Term Forecasts
Regional Oil Demand
Table: Latin America Long-term Oil Consumption (000b/d), 2014-2021
Regional Oil Supply
Table: Latin America Long-term Oil Production (000b/d), 2014-2021
Regional Gas Demand
Table: Latin America Long-Term Gas Consumption (bcm) 2014-2021
Regional Gas Supply
Table: Latin America – Long-Term Gas Production (bcm), 2014-2021
Methodology And Risks To Forecasts
Glossary Of Terms
Table: Glossary Of Terms
Oil And Gas Risk/Reward Ratings Methodology
Ratings Overview
Table: BMI’s Oil & Gas Business Environment Ratings – Structure
Indicators
Table: BMI’s Oil & Gas Upstream Ratings – Methodology
Table: BMI’s Oil & Gas Business Environment Downstream Ratings – Methodology
BMI Methodology
How We Generate Our Industry Forecasts
Energy Industry
Cross checks
Sources
- Anadarko Petroleum
- BG do Brasil
- BP Brasil
- Chevron Brasil
- Cosan
- Devon Energy
- Eni
- Esso Brasileira de Petróleo
- Galp Energia
- Maersk Oil
- Mitsui
- OGX Brazil
- Partex
- Petróleo Brasileiro
- Repsol YPF Brasil
- Shell Brasil
- Sonangol
- Statoil do Brasil
- Total
- Ultrapar Participações (Grupo Ultra)
- Vale do Rio
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