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Petrobras will double in size in seven years

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  • #1667


    Petrobras will double in size by 2020. The statement was made today by the Company’s CEO, Maria das Graças Silva Foster, during the Offshore Technology Conference (OTC), in Houston (USA). The CEO presented the lecture “The Future of Energy in Brazil: the role of Petrobras”, during the panel called “Global Energy Outlook – Shaping the Future!”.

    The CEO highlighted that production in Brazil, which was 2.2 million barrels of oil equivalent (oil and natural gas) per day in 2012, will reach 5.7 million in 2020. And the pre-salt will be largely responsible for this increase. “We (Petrobras) have made 53 discoveries in Brazil during the last 14 months. In the pre-salt alone there were 15 discoveries”, she emphasized. “Petrobras’ reserves have the potential to double in size and reach 31.5 billion barrels of oil equivalent in the coming years,” she added. For her, there is no doubt that the results are due to the Company’s investments, which have increased at a rate of 21.5% per year since 2000 and reached US$ 42.9 billion in 2012.

  • #4484


    Petrobras announce cumulative production in the pre-salt already exceeds 192 million barrels of oil equivalent

    Carlos Tadeu Fraga, Executive Manager for Petrobras’ Pre-salt Exploration and Production, announced today at the Offshore Technology Conference (OTC 2013) that, between 2008 and April 2013, the cumulative production from the pre-salt reservoirs in the Campos and Santos Basins has reached 192.4 million barrels of oil equivalent (oil and gas). According to the executive, daily production exceeded 311,000 barrels per day on April 17, more than double the daily average production of 121,000 barrels in 2011. The average pre-salt production in April was 294,000 barrels per day.

    Carlos Tadeu highlighted the pre-salt results during the “Megaprojects: Exploring the Opportunities and Challenges” panel this Wednesday morning, May 8. He also participated in the OTC lunch-lecture yesterday (May 7) and updated those present on the work in the pre-salt and the prospects and projects for the region.

  • #4483


    Petrobras, Once Symbol of Brazil’s Oil Hopes, Strives to Regain Lost Swagger
    By  Published: March 26, 2013   <see full article at @   > RIO DE JANEIRO — Brazil’s oil production is falling, casting doubt on what was supposed to be an oil bonanza. Imports of gasoline are rising rapidly, exposing the country to the whims of global energy markets. Even the nation’s ethanol industry, once envied as a model of renewable energy, has had to import ethanol from the United States.
    Half a decade has passed since Brazilians celebrated the discovery of huge amounts of oil in deep-sea fields by the national oil company, Petrobras, triumphantly positioning the country to surge into the top ranks of global producers. But now another kind of energy shock is unfolding: the colossal company, long known for its might, is losing the race to keep up with the nation’s growing energy demands.
    Saddled with a nationalist mandate to buy ships, oil platforms and other equipment from lethargic Brazilian companies, the oil giant is now facing soaring debt, major projects mired in delays and older fields, once prodigious, that are yielding less oil. The undersea bounty in its grasp also remains devilishly complex to exploit.
    Now, instead of symbolizing Brazil’s rise as a global powerhouse, Petrobras embodies the sluggishness of the nation’s economy itself, which, after racing ahead at 7.5 percent in 2010, slowed to less than 1 percent last year, eclipsed by growth in other Latin American nations like Mexico and Peru.
    Until recently Petrobras was second in value only to ExxonMobil among publicly traded energy companies. But its fortunes have tumbled to the point where it is now worth less than Conlombia’s national oil company.
    [“Petrobras was once thought indestructible, but that is no longer the case,” said Adriano Pires, a prominent Brazilian energy consultant. “Petrobras is now a tool of short-term economic policy, used to protect domestic industry from competition and fight inflation. This disastrous process will intensify if it is not reversed.”
    Ms. Rousseff, like her predecessor and political mentor, Luiz Inácio Lula da Silva, has relied heavily on state companies like Petrobras to create jobs and spur the economy. As a result, the president and her top advisers argue, unemployment remains near historic lows, an approach in economic management that contrasts sharply with Europe and the United States.
    In a recent speech, Ms. Rousseff explained that her government’s priority was lifting millions of Brazilians out of poverty.
    “Those betting against us,” she warned, “will suffer serious financial and political losses.”
    Bolstering Ms. Rousseff’s approval ratings going into a presidential election in 2014, Petrobras is building new refineries, pursuing offshore oil and buying most of its equipment from Brazilian companies, all of which have created tens of thousands of jobs and delivered some tangible political benefits.
    “My life is better,” said Adinael Soares Silva, 38, a welder at a Petrobras refinery under construction in Itaboraí, a city near Rio de Janeiro. He said he was pleased with his salary of about $800 a month. “Where I was, I didn’t have enough to have a savings account,” he said. “Now I do.”
    But while Petrobras has helped keep Brazil’s unemployment low, around 5.4 percent, a growing chorus of critics points to the obvious problems at the company, including its backlog of projects and an inability to satisfy the country’s thirst for oil, forcing it to import foreign gasoline and sell it at a loss.
    After Brazil made its deep-sea oil discoveries in 2007, the government pushed to put Petrobras firmly in control of the new areas, a move that critics say could strain the company even further. It was a marked departure from the 1990s, when authorities ended Petrobras’s monopoly as part of a radical restructuring of the economy. Petrobras remained under state control but was exposed to market forces, emerging as a hybrid nimbly competing with foreign oil companies.
    Today, Petrobras seems far less nimble. In 2012, its production fell 2 percent, the first such decline in years.
    The international energy industry is also changing, especially in the United States, as momentum shifts toward extracting oil and natural gas from onshore shale formations. Brazil is thought to have large shale reserves itself, but the government remains focused on its costly deep-sea megaprojects.
    “The United States is redrawing the global petroleum map, while in Brazil euphoria has given way to inertia,” Folha de São Paulo, one of Brazil’s most influential newspapers, said in a recent editorial.
    Compounding matters, Brazil’s demand for gasoline surged about 20 percent in 2012, reflecting a car-manufacturing industry that has boomed partly as a result of government efforts to lift production.
    Petrobras still lacks enough refineries able to process crude oil, forcing it to buy increasing amounts of gasoline from abroad. And it is still losing money on gasoline imports as the government keeps domestic fuel prices relatively low, to keep inflation from accelerating in a slow-growing economy.
    Energy analysts contend that the government is using Petrobras to further its own political objectives. Ms. Rousseff’s administration, for instance, has hewed to measures aimed at reviving the country’s shipbuilding industry, by requiring Petrobras to buy many of its ships and oil platforms from Brazilian shipyards.
    But these ventures have struggled with large cost overruns of their own, sometimes delivering vessels late or not at all, cutting into Petrobras’s hopes of meeting ambitious production targets.
    Then there are the delays at oil refineries under construction. One such complex, in Pernambuco State, was conceived in 2005 as a way for Brazil to forge closer political ties with oil-rich Venezuela. Eight years later, Venezuela has yet to invest in the project, which has faced various delays as Petrobras shoulders the entire cost of building it.
    Describing the accumulation of problems at Petrobras, Exame, Brazil’s top business magazine, bluntly accused the government of “destroying Brazil’s largest company,” accompanying the claim with an illustration of a fuel dispenser from a filling station in the shape of a noose.
    The sense of dismay reflects, at least in part, Petrobras’s stature. Founded in 1953, it wields clout from its Brutalist-style headquarters here in spheres well beyond the energy industry, sponsoring everything from literary festivals to the Carnival celebration in Salvador, a city in northeast Brazil.
    Despite the challenges it faces, Petrobras remains profitable and much less constrained by political ideology than some other large national oil companies. In Mexico, for instance, Pemex has long retained its monopoly status despite production declines, and now the government is considering opening it to greater private investment.
    Petrobras is also far more transparent than Petróleos de Venezuela, the national oil company that PresidentHugo Chávez, who died this month, transformed into an extremely politicized pillar of his government, purging it of thousands of employees after a bitter strike and forcing it to focus on new tasks like food distribution.
    Maria das Graças Foster, the chief executive of Petrobras, has been exceptionally frank about the company’s problems. In recent conference calls with analysts, she said that oil production should remain steady this year or perhaps even decline slightly again. But she also responded sharply to critics, claiming that output from the new deep-sea fields had reached 300,000 barrels a day. By 2020, the company expects to double overall production to 4.2 million barrels a day.
    Other executives at the company have similarly sought to temper expectations that Brazil will enter a robust phase of energy independence.
    José Carlos Cosenza, a Petrobras executive, has warned that Brazil may need to import large amounts of fuel for almost another decade. Moreover, gasoline demand is expected to climb even higher as Brazilians buy more cars.
    Taylor Barnes contributed reporting.

  • #4482

    Charles Randall

    First Road-kill for NA Energy/Crude Boom???
    Here are three recent articles on Petrobras projecting different views on the company – one highlights oil production doubling in size to 311 kbpd and reaching 192MM BBL cumulative to date. Another one continues project its long-range projections to double by 2020 building on investments of $42.9B at growth rate 21.5% since 2000 as of 2012. The two of these may be what HAS happened and what might reoccur on long range basis. 
    But the third article more accurately shows what is going happen in the near/short term to Petrobas position. It shows that Petrobras has lost its swagger even as it struggles to regain hopes  in spite of radically changed oil market. The new US bonanza of Shale Crude pushing back imports as well as past rising levels of gasoline imports is bringing the energy shock home to Brazil. Even once modeled Ethanol industry has been forced to import ethanol from US one of its primary consumers.  And its growth has slowed to 7.5% and as now to 1% in 2012 to be eclipsed by other LA oil countires Mexico & Peru! 
    Brazil has failed to respond to US redrawing the Global energy map and as article states Brazil’s euphoria has turned to inertia. 

  • #4481

    Charles Randall

    Here is another one for you – possibly a regular connect the dots case for Petrobras as Roadkill for NA Oil Boom????
    WSJ May 15, 2013 8:08 AM ET

    Brazil Petrobras: Order Could Halt Construction of Comperj Refinery

    RIO DE JANEIRO–Brazilian state-run energy giant Petroleo Brasileiro (PBR, PETR4.BR), or Petrobras, said late Tuesday that it had been notified of a court order suspending environmental licenses for its Comperj refinery project in Rio de Janeiro state.
    The order implied “an immediate work stoppage,” Petrobras said. No further details about the order suspending the environmental licenses were available, according to a Petrobras spokesman.
    Petrobras said that it was evaluating all possible measures related to the halt, which would stop work on one of the company’s largest projects. The Comperj refinery will have installed capacity to process 165,000 barrels of crude oil per day when it enters operation in April 2015, according to the company. A second phase, expected to be completed by 2018, would double capacity.
    When completed, the refinery would ease Petrobras’s dependence on expensive fuel imports that have undercut the company’s profits over the past two years. Petrobras’s refineries are operating at 98% capacity and unable to meet growing demand for gasoline and diesel fuel in Latin America’s largest economy, forcing the company to import gasoline and diesel to meet demand. But the company currently sells the imported fuels at a discount in the domestic market because of a controversial pricing policy that doesn’t pass along international volatility to consumers at the pump.
    Despite a 22% increase in diesel prices and 15% increase in gasoline prices over the past year, local prices remain below international market levels. Petrobras Chief Executive Maria das Gracas Foster has said she is pursuing parity with international prices, but Brazil’s government–and the company’s controlling shareholder–has been reluctant to raise fuel prices for fear of stoking inflation.
    Write to Jeff Fick at

  • #4480


    Do you think something similar could happen to Abreu e Lima now that PdV has backed out of its stake? Last I heard the start-up up the first phase is scheduled for November 2014.

  • #4479

    Charles Randall

    Nope different cases. Comperj couldn’t find Petchem partner & was designed to  Export products despite high domestic need ……also never really made past Planning/Feed stage.
    It was always aggressive of Petrobras to have Comperj in plans for current coking cycle (2012-2017) and was expected to lag into next one (~2018-2023) especially given how aggressive projects were in last cycle & Petrobras 2009 5 year plan where several of existing refinery upgrades/cokers have lagged into this cycle.So ….. it is likely capital/ethanol/gasoline/environmental reasons halted it and rapid downturn of market make it prudent to do it ASAP.  
    I am sure if better run companies are pulling back – other LA Govt ones are going to be hit really hard ….especially those that do check book politics funded by oil like Venezuela or those that are robbed by Govt for support like Pemex (and its getting harder tell difference between those two).
    Abreu e Lima Refinery – better known as Pernambuco (RNEST) has been in the EPC (engineering/Procurement/Construction) stage since 2007 when they first told PDVSA to go pound salt.
    PDVSA wanted to link upgrader to refinery but tried usual commitment stall/hog earnings and Brazil started off  unwilling consider them seriously because they didn’t need imported syncrude since they had just discovered abundance offshore crude.
    Northern Brazil ~isolated system long way from infrastructure Petrobras with captive demand.
    Last I saw in Mar 2013 they were 60% done with target date 2016 completion & know Curtis Wright was doing the coker auto unheading system – but not seen anything on coker status – drums should be built & delivered by now.  
    The Argus Petcoke Conf Sept 2012 had a Petrobras presentation with construction overview shot & quick search I found a ~spot holder coker photo.  

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