Brazils real estate market is set for huge growth in the wake of the country’s latest oil finds, as the positive effects of a thriving oil market are felt throughout the Brazilian economy.
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.
Petrobras, the country’s leading manager of oil and gas exploration, has grown exponentially in the last 12 months in the wake of the continued oil finds. A recent survey by Ernst & Young ranked it as the worlds eighth biggest company in market value.
As little as a year ago, Petrobras market value was 95.9 billion US dollars, a respectable 37th place. Oil finds and advances in technology have seen the market value surge to 164.8 billion US dollars to the eighth place in the ranking of the worlds biggest corporations.
The discovery of another huge oil find this September in Brazils Santos Basin, Petrobas in conjunction with the United Kingdoms BG Group and Spain’s Repsol was the result of a fourth well was drilled in the BM-S-9 block off the country’s south-eastern coast.
This was the second find in less than a week in the Santos region and adds to the previous deposit that holds the equivalent of 1.2 to 2bn barrels of recoverable oil and gas. A company statement did not say how much larger the new discovery would make the reserves.
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.
Petrobras chief executive, Jose Sergio Gabrielli said this further boosts Brazils chances of becoming a leading producer of oil and We are in a fantastic moment.
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