Driven by the pre-sal layer, national production reached 3 million barrels per day last year and the trend is to continue to rise in the coming years
The increase in production of Petrolium has made the product gain ever more importance in the Brazilian export basket. And that movement isn’t likely to change any time soon. From now on, this growth is expected to continue and can contribute robust results to the country’s foreign trade.
In practice, if this positive scenario is confirmed, oil will represent greater inflows of dollars into the country and resources for the producing states through royalties.
Last year, crude oil exports reached US$42.5 billion – a record value – and accounted for 12.7% of everything Brazil traded abroad. It was the second largest commodity sold by the country, behind only soybeans ($46.5 billion).
“In recent years, Brazil has increased oil production and this movement should continue,” he says. Jose Augusto Castroexecutive chairman of Brazilian Foreign Trade Association (AEB). “As the quantity (product) rises and the price does not fall much, the tendency is to increase this share (in the export list).”
In volume, oil exports grew by 1.7% in 2022 compared to the previous year, to 68.7 million tons.
“I would say that the oil sector is one of those that will contribute the most to the Brazilian trade balance from now on,” he says. Adrian Piresdirector of the Brazilian Infrastructural Center (CBIE).
Between January and July this year, exports totaled $22.3 billion, slightly below the figure for the same period in 2022 ($23.1 billion). “This drop was already expected due to the lower oil price,” Castro says.
level change
For a country that has always politicized its relationship with oil – the campaign, for example, with the motto “oil is ours” in the Vargas era – and has suffered the shocks of the 1970s, the industry numbers show that the country has changed levels in recent years.
In 2022, Brazil consolidated as the world’s ninth largest oil producer and appeared among the top ten exporters.
The production growth scenario can be explained, in part, by the pre-sal trend and the oil price increase observed in recent decades, which makes exploration viable and attractive. In the 1980s and 1990s, the price of a barrel reached 20 US dollars. It fluctuated above $85 today.
“The appreciation of the barrel of oil has been decisive for the new frontiers (of exploration) achieve cost-effectiveness,” says João Victor Marques, researcher at FGV Power
The pre-sale represents about 75% of the production and has a great additional advantage: the operating cost is low and makes the production attractive, even in the presence of a drop in prices. “Companies prioritize investments in those areas where they can withstand price volatility. When it’s high, it’s great. When it’s low, it’s still profitable,” says Walter de Vitto, economist and partner at Tendências Consultoria.
Between 2002 and 2022, oil production rose from nearly 1.5 million barrels a day to 3.1 million barrels last year, according to consultancy firm Tendências. In 2027 it should rise to 3.9 million barrels. The expectation is that it will continue to grow until the end of this decade, when pre-salt mining should start to lose steam.
The path through exports also came naturally, as the country has seen its refining capacity stagnate at just over 2 million barrels per day over the past decade. Today, Brazil is technically self-sufficient in oil production and, therefore, any increase in production ends up being exported.
“The country has contracted an increase in oil production and, other things being equal, there should be an increase in exports,” says de Vitto. “What could ultimately prevent that from happening is increasing refining capacity, because you wouldn’t be exporting oil to use it here.”
new frontiers
The forecast that pre-salt production should reach its peak by the end of the decade opens an important debate on the new frontiers of exploration in a context in which the energy transition is gaining momentum.
The most recent debate has to do with the Equatorial Rim, which is located between Amapá and Rio Grande do Norte, and is formed by five basins: Foz do Amazonas, Potiguar, Pará-Maranhão, Barreirinhas and Ceará.
“The search for new exploration frontiers is linked to giving continuity to this growth in pre-salt production,” says Marques, of FGV Energia.
Exploration of the equatorial rim has become taboo within the government Luiz Inácio Lula da Silva. The Brazilian Institute for the Environment and Renewable Natural Resources (IBAMA) denied a request from Petrobras of oil exploration near Foz do Amazonas. The theme too were opposed by the Minister of the Environment, Marina Silva, and the Minister of Mines and Energy, Alexandre Silveira.
Earlier this month, Lula said so Ibama’s decision is not final and that a decision must be made soon. In the declaration of the Amazon Summit, signed by the eight countries that host the forest in their territory, there was no mention of the elimination of oil exploration plans in the region.
“Assuming that the world will continue to need oil for a few decades, it will be necessary to supply oil with less carbon intensity, and Brazil is able to do this,” says the FGV Energia researcher.
47 Petrobras projects have been included in the new Growth Acceleration Program (CAP), including new exploratory wells on the Equatorial Rim.
Source: Terra
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