Over the last few years, Brazil has attracted billions of dollars in energy investment, significantly boosted its oil reserves and cemented its status as a global energy leader and an economic force. With the global scales of power shifting to emerging economies in the next decade, Brazil will definitely cement itself as one of the world's major economies, and, given T&T's proximity to the country, there surely is scope for local businesses, whether private or state enterprise, to break into Brazilian markets and simultaneously learn lessons from their Brazilian counterparts. The Energy Chamber of T&T is working with the Government of T&T to put together a delegation of business leaders from the energy services sector to accompany Prime Minister Kamla Persad-Bissessar and other government officials on a trade delegation to Brazil from April 26-30.
The trip will involve meetings with potential customers and business partners in the booming oil and gas sector, based in Rio de Janeiro, and other industries in the city of Sao Paulo. The Energy Chamber's strategic plan for the sector looks both inwards and outwards, promoting energy investment through an efficient business sector as well as exporting local energy services to foreign markets. T&T companies can leverage their existing relationships with multi-national companies operating in the domestic market, such as BG, to find opportunities in some other major oil and gas provinces. The trip to Brazil will assist our companies to seek new opportunities where our energy sector expertise can be leveraged in one of the world's major new oil and gas provinces and is a continuation of the chamber's mandate to seek new markets for our members.
As you are reading this article, the Energy Chamber will be leading a trade mission to Ghana, our third trade mission to Africa in as many years. It signals our commitment to promoting the country as a producer and exporter of energy industry best practice, a net exporter of energy services expertise and skill. Tangible business deals were secured and new business leads were discovered in our past trade missions. The Energy Chamber is optimistic that similar opportunities exist in Brazil.
An overview of Brazil's energy sector
In the last year few years, Brazil has had unprecedented exploration and production success. The country now has 12.9 billion barrels of proven reserves. The Campos and Santos Basins, located off of the country's southeast coast, hold the majority of Brazil's proven reserves. In 2010, Brazil produced 2.7 million barrels per day (bbl/d) of liquids, of which 75 per cent was crude oil. Led by state company Petrobras, Brazil's pre-salt discoveries have boosted their estimated reserves. In 2007, the Tupi field, recently renamed Lula, was discovered by a consortium of Petrobras, BG Group, and Petrogal. In fact, the Lula and Cernambi fields are now estimated to have total recoverable reserves of 8.3 billon barrels of oil equivalent (boe) - 6.5 billion boe for Lula and 1.8 billion for Cernambi.
According to the US Energy Information Administration, "Following Lula, numerous additional pre-salt finds were announced in the Santos Basin, such as Iracema, Carioca, Iara, Libra, Franco and Guara. Additional pre-salt discoveries were also announced in the Campos and Espirito Santo Basins. Estimates for the total pre-salt resources vary. Some analysts place total extent of pre-salt recoverable oil and natural gas reserves at more than 50 billion barrels of oil equivalent." In its latest investor guide, Petrobras announced that the company plans to invest US$33 billion in pre-salt exploration and production activities to achieve an overall oil production target of close to four million barrels per day by 2020.
While Brazil's oil production is projected to grow quickly, the country only produced 383 billion cubic feet of natural gas in 2009 (see box). In the last two years, Brazil has opened two re-gasification terminals: the Pecem terminal in the northeast, and the Guanabara Bay terminal in the southeast. Pecem received its first LNG cargo from T&T and, according to Brazil's National Agency of Petroleum, Natural Gas and Biofuels, in 2009 the majority of Brazil's 15 trillion cubic feet of LNG came from these shores. Several of the major upstream players operating in T&T such as BG and Repsol, have also invested heavily in Brazil's pre-salt acreage. Brazil is also a leading producer of ethanol, producing 450,000 barrels per day.
For more information on the article and the Brazil delegation, please contact Sherwin Long at: sherwin@energy.tt, or Priya Marajh at: priya@energy.tt Visit: www.energy.tt