Gulf investments

Dubai: Investment opportunities worth more than $500 billion (Dh1.83 trillion) in energy, transportation, education, health care and other critical sectors of economic development continue to beckon for contractors in the Gulf, industry experts said.

"GCC countries have significant trade surpluses which they are planning to invest in order to diversify their economies' dependence on oil revenues and also to develop their countries and satisfy the demands of their people following the Arab Spring. The region certainly is expected to continue to offer a lot of opportunity for contractors," said Rizwan Shah, managing director, Corporate Finance, and leader of Deloitte's Capital Projects Advisory services practice for the Middle East.

Despite grappling with challenges and delivery issues related to current projects, major opportunities remain prevalent in Saudi Arabia, Qatar, Abu Dhabi and Iraq this year.

Shah said the UAE is ranked the second largest market with investments worth $9 billion allocated to buildings, infrastructure and energy in the first quarter.

Abu Dhabi in particular accounted for 70 per cent of the $20 billion in contracts awarded between first and third quarters of 2011.

Driving this growth, with over $12 billion in awarded contracts, the emirate is placing "particular attention on transport, utilities and social infrastructure," Shah said.

Of the biggest investments currently underway is Qatar's plan to spend $100 billion in preparation to host the 2022 World Cup and Saudi Arabia's capital spend programme approaching $400 billion over the next ten years.

Laurie Voyer, CEO and managing director of Al Habtoor Leighton LLC, said: "The market is probably best described as challenging. The challenges we're facing now, as described above, will remain for the foreseeable future."

Area of growth

However, he said significant opportunities still exist — particularly in Qatar, Saudi Arabia and Iraq — and for those who are able to demonstrate that they can deliver to an international standard, the region can still be an area of growth."

Backed by vast oil-based reserves and government stimulus packages, Deloitte's latest report said that the economic prospects of the GCC region have remained positive despite ongoing political unrest in the wider Middle East.

"The oil and gas exporting countries, such as Saudi Arabia, Qatar and Abu Dhabi, have an additional objective which is the need to diversify their economies away from the traditional petrochemical and hydrocarbon industries.

"This is also driving infrastructure spending in these countries.

"These countries are now looking at how to take advantage of existing strengths to develop upstream industries — and the focus has shifted to construction," Shah said.

Construction contracts alone worth $40 billion were awarded to contractors in the first quarter of 2011, 47 per cent of which were in the energy sector.

"The region certainly is expected to continue to offer a lot of opportunity for contractors," said Cynthia Corby, audit partner Deloitte Middle East and leader of the construction industry for the UAE.

The report indicates that there are vast opportunities across the Middle East, with longer term infrastructure investment plans for the region estimated to be in excess of $1 trillion.

In terms of projects in the pipeline across the Middle East, the majority are social (36 per cent); 29 per cent power-related; 13 per cent in transport and 13 per cent in oil and gas.

Budget value of contacts to be awarded in Saudi Arabia in 2011 onwards is set to increase to $35 billion, as compared to $25 billion in 2006.

The government is undertaking grand investments, with plans nearing $400 billion in five years, demonstrating an increasing trend of projects that will need to be awarded in the coming years ahead. The construction market is therefore expected to be one of the most buoyant in the world.

Qatar holds an eight per cent share of the value of the regional projects. Projects planned to be underway in the future are valued at approximately $230 billion.

Gulf investments

Dubai: Investment opportunities worth more than $500 billion (Dh1.83 trillion) in energy, transportation, education, health care and other critical sectors of economic development continue to beckon for contractors in the Gulf, industry experts said.

"GCC countries have significant trade surpluses which they are planning to invest in order to diversify their economies' dependence on oil revenues and also to develop their countries and satisfy the demands of their people following the Arab Spring. The region certainly is expected to continue to offer a lot of opportunity for contractors," said Rizwan Shah, managing director, Corporate Finance, and leader of Deloitte's Capital Projects Advisory services practice for the Middle East.

Despite grappling with challenges and delivery issues related to current projects, major opportunities remain prevalent in Saudi Arabia, Qatar, Abu Dhabi and Iraq this year.

Shah said the UAE is ranked the second largest market with investments worth $9 billion allocated to buildings, infrastructure and energy in the first quarter.

Abu Dhabi in particular accounted for 70 per cent of the $20 billion in contracts awarded between first and third quarters of 2011.

Driving this growth, with over $12 billion in awarded contracts, the emirate is placing "particular attention on transport, utilities and social infrastructure," Shah said.

Of the biggest investments currently underway is Qatar's plan to spend $100 billion in preparation to host the 2022 World Cup and Saudi Arabia's capital spend programme approaching $400 billion over the next ten years.

Laurie Voyer, CEO and managing director of Al Habtoor Leighton LLC, said: "The market is probably best described as challenging. The challenges we're facing now, as described above, will remain for the foreseeable future."

Area of growth

However, he said significant opportunities still exist — particularly in Qatar, Saudi Arabia and Iraq — and for those who are able to demonstrate that they can deliver to an international standard, the region can still be an area of growth."

Backed by vast oil-based reserves and government stimulus packages, Deloitte's latest report said that the economic prospects of the GCC region have remained positive despite ongoing political unrest in the wider Middle East.

"The oil and gas exporting countries, such as Saudi Arabia, Qatar and Abu Dhabi, have an additional objective which is the need to diversify their economies away from the traditional petrochemical and hydrocarbon industries.

"This is also driving infrastructure spending in these countries.

"These countries are now looking at how to take advantage of existing strengths to develop upstream industries — and the focus has shifted to construction," Shah said.

Construction contracts alone worth $40 billion were awarded to contractors in the first quarter of 2011, 47 per cent of which were in the energy sector.

"The region certainly is expected to continue to offer a lot of opportunity for contractors," said Cynthia Corby, audit partner Deloitte Middle East and leader of the construction industry for the UAE.

The report indicates that there are vast opportunities across the Middle East, with longer term infrastructure investment plans for the region estimated to be in excess of $1 trillion.

In terms of projects in the pipeline across the Middle East, the majority are social (36 per cent); 29 per cent power-related; 13 per cent in transport and 13 per cent in oil and gas.

Budget value of contacts to be awarded in Saudi Arabia in 2011 onwards is set to increase to $35 billion, as compared to $25 billion in 2006.

The government is undertaking grand investments, with plans nearing $400 billion in five years, demonstrating an increasing trend of projects that will need to be awarded in the coming years ahead. The construction market is therefore expected to be one of the most buoyant in the world.

Qatar holds an eight per cent share of the value of the regional projects. Projects planned to be underway in the future are valued at approximately $230 billion.

Gulf investments

Dubai: Investment opportunities worth more than $500 billion (Dh1.83 trillion) in energy, transportation, education, health care and other critical sectors of economic development continue to beckon for contractors in the Gulf, industry experts said.

"GCC countries have significant trade surpluses which they are planning to invest in order to diversify their economies' dependence on oil revenues and also to develop their countries and satisfy the demands of their people following the Arab Spring. The region certainly is expected to continue to offer a lot of opportunity for contractors," said Rizwan Shah, managing director, Corporate Finance, and leader of Deloitte's Capital Projects Advisory services practice for the Middle East.

Despite grappling with challenges and delivery issues related to current projects, major opportunities remain prevalent in Saudi Arabia, Qatar, Abu Dhabi and Iraq this year.

Shah said the UAE is ranked the second largest market with investments worth $9 billion allocated to buildings, infrastructure and energy in the first quarter.

Abu Dhabi in particular accounted for 70 per cent of the $20 billion in contracts awarded between first and third quarters of 2011.

Driving this growth, with over $12 billion in awarded contracts, the emirate is placing "particular attention on transport, utilities and social infrastructure," Shah said.

Of the biggest investments currently underway is Qatar's plan to spend $100 billion in preparation to host the 2022 World Cup and Saudi Arabia's capital spend programme approaching $400 billion over the next ten years.

Laurie Voyer, CEO and managing director of Al Habtoor Leighton LLC, said: "The market is probably best described as challenging. The challenges we're facing now, as described above, will remain for the foreseeable future."

Area of growth

However, he said significant opportunities still exist — particularly in Qatar, Saudi Arabia and Iraq — and for those who are able to demonstrate that they can deliver to an international standard, the region can still be an area of growth."

Backed by vast oil-based reserves and government stimulus packages, Deloitte's latest report said that the economic prospects of the GCC region have remained positive despite ongoing political unrest in the wider Middle East.

"The oil and gas exporting countries, such as Saudi Arabia, Qatar and Abu Dhabi, have an additional objective which is the need to diversify their economies away from the traditional petrochemical and hydrocarbon industries.

"This is also driving infrastructure spending in these countries.

"These countries are now looking at how to take advantage of existing strengths to develop upstream industries — and the focus has shifted to construction," Shah said.

Construction contracts alone worth $40 billion were awarded to contractors in the first quarter of 2011, 47 per cent of which were in the energy sector.

"The region certainly is expected to continue to offer a lot of opportunity for contractors," said Cynthia Corby, audit partner Deloitte Middle East and leader of the construction industry for the UAE.

The report indicates that there are vast opportunities across the Middle East, with longer term infrastructure investment plans for the region estimated to be in excess of $1 trillion.

In terms of projects in the pipeline across the Middle East, the majority are social (36 per cent); 29 per cent power-related; 13 per cent in transport and 13 per cent in oil and gas.

Budget value of contacts to be awarded in Saudi Arabia in 2011 onwards is set to increase to $35 billion, as compared to $25 billion in 2006.

The government is undertaking grand investments, with plans nearing $400 billion in five years, demonstrating an increasing trend of projects that will need to be awarded in the coming years ahead. The construction market is therefore expected to be one of the most buoyant in the world.

Qatar holds an eight per cent share of the value of the regional projects. Projects planned to be underway in the future are valued at approximately $230 billion.

Gas Natural Brasil (Eng. Humberto Viana)

Se depender dos números expostos na página 47 do Plano de Negócios (PN) 2011-2015 da Petrobras, a resposta é sim.

O PN dividiu a oferta e a demanda do Gás Natural (GN) em dois períodos, 2015 e 2020. Analisemos os números. Para 2015, está prevista uma oferta total de 149 milhões de metros cúbicos por dia (mm³/d), sendo 78 mm³/d de GN nacional; 41 mm³/d de Gás Natural Liqueito (GNL, importado) e 30 mm³/d da Bolívia. Nesse mesmo ano, a demanda total é de 151 mm³/d, sendo que 59 mm³/d para as térmicas (Petrobras e terceiros); 53 mm³/d para as distribuidoras de GN; e 39 mm³/d para a Petrobras (refino e fertilizantes). Observando os números, vemos que há um pequeno déficit de 2 mm³/d, o que pode ser facilmente solucionado, como maior produção nacional (mais provável) ou com importação.

Para 2020, temos uma previsão de oferta total de 173 mm³/d, sendo 102 mm³/d de GN nacional; 41 mm³/d de GNL e 30 mm³/d da Bolívia. A demanda total prevista é de 200 mm³/d, sendo 76 mm³/d para as térmicas; 63 mm³/d para as distribuidoras; e 61 mm³/d para refino e fertilizantes. Ou seja, em 2020 teremos um déficit entre oferta e demanda da ordem de 27 mm³/d.

Esse déficit, mesmo com aumento da produção nacional de 30,77% (78 mm³/d e 102 mm³/d em 2015 e 2020, respectivamente), deve-se ao fato de que haverá um aumento substancial na demanda entre 2015 e 2020 da ordem de 32,45% (151 mm³/d e 200 mm³/d). Pergunta-se: de onde virá esse volume faltante?

O grave nesse panorama é que não vemos a curto nem a médio prazos uma produção nacional que nos deixe livre das amarras e chantagens dos bolivarianos de plantão liderados pelo "cumpanhero (sic!) Evo", que humilharam há alguns anos o nosso país e confiscaram os ativos do povo brasileiro, sob o olhar leniente dos governantes de então, quando o caminho correto seria os tribunais internacionais. 

De positivo, vemos que a produção nacional de GN, entre altos e baixos, ao contrário da produção de petróleo e derivados, vem tendo uma boa performance. Entre 2000 e 2011, a produção saltou de 36,414 mm³/d para 65,955 mm³/d, aumento de 81,12%; média anual de 6,76%. No primeiro mês de 2012, observamos um recorde na produção diária de 71,093 mm³/d, o que representa um aumento de 7,30% em relação ao mesmo mês do ano anterior. No entanto, para que nos livrássemos da dependência da Bolívia teríamos que crescer 11,0% de forma contínua até 2020, e aí teríamos uma produção nacional de 164 mm³/d que, acrescidos aos 41 mm³/d de GNL, alcançaria 205 mm³/d.

Importante ressaltar o grande esforço realizado pela ANP e pela Petrobras no sentido de diminuir os enormes desperdícios relacionados à reinjeção e queima observadas nestes últimos 10 anos. Em 2002, tivemos uma média diária de 9,269 mm³/d de reinjeção, o que representou 21,81% do total produzido, e 5,844 mm³/d referentes à queima, 13,75% do total. Ou seja, naquele ano, do total produzido, 35,56% não foram utilizados.

Em janeiro de 2012, temos um panorama mais ajustado. A reinjeção foi de 11,256 mm³/d, 15,83% do total produzido, e 4,493 mm³/d referentes à queima, 6,32% do total, resultando entre reinjeção e perda 22,15%. Pelos números apresentados, observamos que estes números podem melhorar ainda mais. Afinal, entre 2002 e 2012, a queima foi reduzida em mais da metade do total produzido (13,75% contra 6,32%).  

No tocante ao GNL, mais caro que o gás convencional em função de suas particularidades, o mesmo continuará sendo importado até que os grandes campos do pré-sal (se confirmados os seus volumes e viabilidade econômica) comecem a produzir. No entanto, como já alertei em textos anteriores, devido à grande distância entre os campos do pré-sal e o continente e outros fatores técnicos, está descartada a utilização de gasodutos para o seu transporte.

Assim, teremos que fazer a transformação do GN em GNL utilizando o sistema offshore e onboard em plataformas do tipo Floating Liquefied Natural Gás – FLNG (plataforma flutuante para liquefação de gás natural), do tipo que será utilizada pela Shell ® no campo de Prelude, na Austrália, conforme descrevi no texto Solução para o gás do pré-sal, publicado no Jornal do Brasil, em 2 de janeiro do ano em curso. Em menor escala, poderemos, também, utilizar o GN do pré-sal na geração de energia offshore, que seria transportada através de cabos submarinos.

Um fato é cristalino: temos que trabalhar para não depender dos humores bolivarianos da Bolívia. Tenho absoluta certeza de que, com afinco, conseguiremos nossos objetivos.

Humberto Viana Guimarães, engenheiro civil e consultor, é formado pela Fundação Mineira de Educação e Cultura, com especialização em materiais explosivos, estruturas de concreto, geração de energia e saneamento

Gas Natural Brasil (Eng. Humberto Viana)

Se depender dos números expostos na página 47 do Plano de Negócios (PN) 2011-2015 da Petrobras, a resposta é sim.

O PN dividiu a oferta e a demanda do Gás Natural (GN) em dois períodos, 2015 e 2020. Analisemos os números. Para 2015, está prevista uma oferta total de 149 milhões de metros cúbicos por dia (mm³/d), sendo 78 mm³/d de GN nacional; 41 mm³/d de Gás Natural Liqueito (GNL, importado) e 30 mm³/d da Bolívia. Nesse mesmo ano, a demanda total é de 151 mm³/d, sendo que 59 mm³/d para as térmicas (Petrobras e terceiros); 53 mm³/d para as distribuidoras de GN; e 39 mm³/d para a Petrobras (refino e fertilizantes). Observando os números, vemos que há um pequeno déficit de 2 mm³/d, o que pode ser facilmente solucionado, como maior produção nacional (mais provável) ou com importação.

Para 2020, temos uma previsão de oferta total de 173 mm³/d, sendo 102 mm³/d de GN nacional; 41 mm³/d de GNL e 30 mm³/d da Bolívia. A demanda total prevista é de 200 mm³/d, sendo 76 mm³/d para as térmicas; 63 mm³/d para as distribuidoras; e 61 mm³/d para refino e fertilizantes. Ou seja, em 2020 teremos um déficit entre oferta e demanda da ordem de 27 mm³/d.

Esse déficit, mesmo com aumento da produção nacional de 30,77% (78 mm³/d e 102 mm³/d em 2015 e 2020, respectivamente), deve-se ao fato de que haverá um aumento substancial na demanda entre 2015 e 2020 da ordem de 32,45% (151 mm³/d e 200 mm³/d). Pergunta-se: de onde virá esse volume faltante?

O grave nesse panorama é que não vemos a curto nem a médio prazos uma produção nacional que nos deixe livre das amarras e chantagens dos bolivarianos de plantão liderados pelo "cumpanhero (sic!) Evo", que humilharam há alguns anos o nosso país e confiscaram os ativos do povo brasileiro, sob o olhar leniente dos governantes de então, quando o caminho correto seria os tribunais internacionais. 

De positivo, vemos que a produção nacional de GN, entre altos e baixos, ao contrário da produção de petróleo e derivados, vem tendo uma boa performance. Entre 2000 e 2011, a produção saltou de 36,414 mm³/d para 65,955 mm³/d, aumento de 81,12%; média anual de 6,76%. No primeiro mês de 2012, observamos um recorde na produção diária de 71,093 mm³/d, o que representa um aumento de 7,30% em relação ao mesmo mês do ano anterior. No entanto, para que nos livrássemos da dependência da Bolívia teríamos que crescer 11,0% de forma contínua até 2020, e aí teríamos uma produção nacional de 164 mm³/d que, acrescidos aos 41 mm³/d de GNL, alcançaria 205 mm³/d.

Importante ressaltar o grande esforço realizado pela ANP e pela Petrobras no sentido de diminuir os enormes desperdícios relacionados à reinjeção e queima observadas nestes últimos 10 anos. Em 2002, tivemos uma média diária de 9,269 mm³/d de reinjeção, o que representou 21,81% do total produzido, e 5,844 mm³/d referentes à queima, 13,75% do total. Ou seja, naquele ano, do total produzido, 35,56% não foram utilizados.

Em janeiro de 2012, temos um panorama mais ajustado. A reinjeção foi de 11,256 mm³/d, 15,83% do total produzido, e 4,493 mm³/d referentes à queima, 6,32% do total, resultando entre reinjeção e perda 22,15%. Pelos números apresentados, observamos que estes números podem melhorar ainda mais. Afinal, entre 2002 e 2012, a queima foi reduzida em mais da metade do total produzido (13,75% contra 6,32%).  

No tocante ao GNL, mais caro que o gás convencional em função de suas particularidades, o mesmo continuará sendo importado até que os grandes campos do pré-sal (se confirmados os seus volumes e viabilidade econômica) comecem a produzir. No entanto, como já alertei em textos anteriores, devido à grande distância entre os campos do pré-sal e o continente e outros fatores técnicos, está descartada a utilização de gasodutos para o seu transporte.

Assim, teremos que fazer a transformação do GN em GNL utilizando o sistema offshore e onboard em plataformas do tipo Floating Liquefied Natural Gás – FLNG (plataforma flutuante para liquefação de gás natural), do tipo que será utilizada pela Shell ® no campo de Prelude, na Austrália, conforme descrevi no texto Solução para o gás do pré-sal, publicado no Jornal do Brasil, em 2 de janeiro do ano em curso. Em menor escala, poderemos, também, utilizar o GN do pré-sal na geração de energia offshore, que seria transportada através de cabos submarinos.

Um fato é cristalino: temos que trabalhar para não depender dos humores bolivarianos da Bolívia. Tenho absoluta certeza de que, com afinco, conseguiremos nossos objetivos.

Humberto Viana Guimarães, engenheiro civil e consultor, é formado pela Fundação Mineira de Educação e Cultura, com especialização em materiais explosivos, estruturas de concreto, geração de energia e saneamento

Gas Natural Brasil (Eng. Humberto Viana)

Se depender dos números expostos na página 47 do Plano de Negócios (PN) 2011-2015 da Petrobras, a resposta é sim.

O PN dividiu a oferta e a demanda do Gás Natural (GN) em dois períodos, 2015 e 2020. Analisemos os números. Para 2015, está prevista uma oferta total de 149 milhões de metros cúbicos por dia (mm³/d), sendo 78 mm³/d de GN nacional; 41 mm³/d de Gás Natural Liqueito (GNL, importado) e 30 mm³/d da Bolívia. Nesse mesmo ano, a demanda total é de 151 mm³/d, sendo que 59 mm³/d para as térmicas (Petrobras e terceiros); 53 mm³/d para as distribuidoras de GN; e 39 mm³/d para a Petrobras (refino e fertilizantes). Observando os números, vemos que há um pequeno déficit de 2 mm³/d, o que pode ser facilmente solucionado, como maior produção nacional (mais provável) ou com importação.

Para 2020, temos uma previsão de oferta total de 173 mm³/d, sendo 102 mm³/d de GN nacional; 41 mm³/d de GNL e 30 mm³/d da Bolívia. A demanda total prevista é de 200 mm³/d, sendo 76 mm³/d para as térmicas; 63 mm³/d para as distribuidoras; e 61 mm³/d para refino e fertilizantes. Ou seja, em 2020 teremos um déficit entre oferta e demanda da ordem de 27 mm³/d.

Esse déficit, mesmo com aumento da produção nacional de 30,77% (78 mm³/d e 102 mm³/d em 2015 e 2020, respectivamente), deve-se ao fato de que haverá um aumento substancial na demanda entre 2015 e 2020 da ordem de 32,45% (151 mm³/d e 200 mm³/d). Pergunta-se: de onde virá esse volume faltante?

O grave nesse panorama é que não vemos a curto nem a médio prazos uma produção nacional que nos deixe livre das amarras e chantagens dos bolivarianos de plantão liderados pelo "cumpanhero (sic!) Evo", que humilharam há alguns anos o nosso país e confiscaram os ativos do povo brasileiro, sob o olhar leniente dos governantes de então, quando o caminho correto seria os tribunais internacionais. 

De positivo, vemos que a produção nacional de GN, entre altos e baixos, ao contrário da produção de petróleo e derivados, vem tendo uma boa performance. Entre 2000 e 2011, a produção saltou de 36,414 mm³/d para 65,955 mm³/d, aumento de 81,12%; média anual de 6,76%. No primeiro mês de 2012, observamos um recorde na produção diária de 71,093 mm³/d, o que representa um aumento de 7,30% em relação ao mesmo mês do ano anterior. No entanto, para que nos livrássemos da dependência da Bolívia teríamos que crescer 11,0% de forma contínua até 2020, e aí teríamos uma produção nacional de 164 mm³/d que, acrescidos aos 41 mm³/d de GNL, alcançaria 205 mm³/d.

Importante ressaltar o grande esforço realizado pela ANP e pela Petrobras no sentido de diminuir os enormes desperdícios relacionados à reinjeção e queima observadas nestes últimos 10 anos. Em 2002, tivemos uma média diária de 9,269 mm³/d de reinjeção, o que representou 21,81% do total produzido, e 5,844 mm³/d referentes à queima, 13,75% do total. Ou seja, naquele ano, do total produzido, 35,56% não foram utilizados.

Em janeiro de 2012, temos um panorama mais ajustado. A reinjeção foi de 11,256 mm³/d, 15,83% do total produzido, e 4,493 mm³/d referentes à queima, 6,32% do total, resultando entre reinjeção e perda 22,15%. Pelos números apresentados, observamos que estes números podem melhorar ainda mais. Afinal, entre 2002 e 2012, a queima foi reduzida em mais da metade do total produzido (13,75% contra 6,32%).  

No tocante ao GNL, mais caro que o gás convencional em função de suas particularidades, o mesmo continuará sendo importado até que os grandes campos do pré-sal (se confirmados os seus volumes e viabilidade econômica) comecem a produzir. No entanto, como já alertei em textos anteriores, devido à grande distância entre os campos do pré-sal e o continente e outros fatores técnicos, está descartada a utilização de gasodutos para o seu transporte.

Assim, teremos que fazer a transformação do GN em GNL utilizando o sistema offshore e onboard em plataformas do tipo Floating Liquefied Natural Gás – FLNG (plataforma flutuante para liquefação de gás natural), do tipo que será utilizada pela Shell ® no campo de Prelude, na Austrália, conforme descrevi no texto Solução para o gás do pré-sal, publicado no Jornal do Brasil, em 2 de janeiro do ano em curso. Em menor escala, poderemos, também, utilizar o GN do pré-sal na geração de energia offshore, que seria transportada através de cabos submarinos.

Um fato é cristalino: temos que trabalhar para não depender dos humores bolivarianos da Bolívia. Tenho absoluta certeza de que, com afinco, conseguiremos nossos objetivos.

Humberto Viana Guimarães, engenheiro civil e consultor, é formado pela Fundação Mineira de Educação e Cultura, com especialização em materiais explosivos, estruturas de concreto, geração de energia e saneamento

Brazil, new kid on the block (Aditya Malhorta)

Brazil's Oil Future: The New (Big) Kid on the Block

THURSDAY, 19 APRIL 2012 00:00 ADITYA MALHOTRA

In a noisy revolution that has announced the arrival of the BRIC countries over the past decade, Brazil quietly emerged in 2011 as the world’s sixth largest economy, the ninth largest consumer of energy and the the seventh largest consumer of oil.  It has also emerged as one of the most influential and rapidly growing economies in the world. Already the South American continent’s powerhouse, Brazil alone accounts for over 40% of the region’s GDP influencing if not determining the direction of development across the continent.  At a time when economies around the world are struggling, Brazil's economy is forecasted to continue remarkable growth. driven in part by its oil and gas sector  which, if realized, would allow it to emerge as a global leader for the first time in crude oil production.   

Crude oil prospects 

The country’s energy policies for the last decade have been significant for the production and development of natural resources, crude oil and gas in particular. Brazil has transformed itself from a major oil importer to an exporter of crude oil. Post 2003, the country followed an aggressive ethanol blending policy. As a national policy, Brazil blends sugarcane-derived alcohol with gasoline rendering an ethanol fuel blend of between 20% -25% [ethanol] based on the country’s sugarcane harvest. Though having less energy per unit volume than gasoline, the cost economics of ethanol, combined with its high octane rating and environmental advantages, make ethanol an important element in Brazil’s energy matrix.  Eighty percent of the cars today in Brazil can run on blended fuel making the country the world’s second largest producer of ethanol while concurrently reducing its consumption of traditional fuels to a great extent.

Critical to changing Brazil’s oil consumption pattern were low taxes on ethanol as a fuel compared to other liquid fuels, providing a minimum support price for sugarcane produced, and investment in research and development.  The country’s ethanol policy along with new found oil transformed Brazil from being oil self-sufficient in 2006 to becoming a net oil exporter in 2009 and as  a result one of the largest non-OPEC oil producers globally. The country’s energy demand is unexpectedly projected to grow steadily in the coming years. To ensure its energy needs, Brazil has progressively initiated an aggressive exploration and production policy for securing oil and gas reserves along its waters in the South Atlantic. The development of major projects in this area has resulted in increasingly large outputs of crude oil, shale oil and gas as well as oil derived from oil sands.

 

 

 

According to the US EIA, Brazil was the largest producer of liquids in South America in 2010. The reserves discovered are so huge that it is expected that the production decline in Venezuela and Mexico would be offset by Brazil to a great extent. With Venezuela’s socialist government increasing its cooperation with China and other Asian nations, and while the US government at the same time is losing production volumes from its traditional ally México, imports from Brazil could play a vital role in shaping the demand and supply balance in the region. New and major discoveries have been taking place in the Campos and the Santos Basin.

 

Map of the Campos and Santos Basin

 

 

 Source: Energy Information Administration 

 

 

The Campos Basin consisting of areas such as Frade, Papa Terra, Roncador and Peregrino are already producing or set to come on-stream soon. The Santos Basin has even larger reserves. The major oilfields located at Tupi, Iara and Guara should reach full scale production post-2015.Some estimate that the oil fields, located off Brazil's southeast Atlantic coast beneath kilometers of ocean and bedrock, contain more than 100 billion barrels of high-quality recoverable oil.

 

 

To ensure the security of its oil, different Brazilian regimes over time have stressed strengthening the country’s defense and naval capabilities.  Its fleet is expanding as Brazil moves to protect key assets in deep waters. Contracts with Britain have already been signed to provide the country with three patrol vessels to secure offshore sites and oil installations. It has been underlined that one of the key components of the National Defense Strategy unveiled in 2008 is to protect the nation’s deep water oil and gas reserves to avoid any disruption in ongoing exploration and production activities. The country has already commenced its nuclear submarine program with technology transfer from France and it is expected that by 2016 Brazil will boast the continent’s largest Navy. The addition of a nuclear submarine would make it make an undisputed power in the region. A strong naval defense fleet would make its influence and dominance even more prominent in the South Atlantic, with no country around to match its power.

Type of crude

Petroleum products including natural gas account for over 50% of the country’s total energy use. Almost all of Brazil’s production comes from Brazil’s offshore rigs which produce heavy sour and heavy sweet crude with a high degree of TAN (Total Acid Number). This requires refineries to be equipped with advanced technologies which translates into a significant refinery complex in order to refine and process various crudes. The refineries in Brazil were initially designed to refine light sweet crude, but with the discovery of new heavy sour crude, existing refineries are being revamped and expanded. This is the prime reason that despite having an abundance of reserves Brazil still imports its oil from countries producing light sweet crude. Construction of new advanced refineries and petrochemical complexes are also taking place on an enormous scale with capacities that are unprecedented in the country.

Brazil’s refinery complex

Brazil has 13 refineries. The Petrobras supply chain [the national oil company] accounts for almost 6% of the country’s GDP. The company currently operates 11 of the country’s 13 refineries with a capacity of over 2 million b/d in 2010. The refining capacity is expected to reach 3.2 million b/d by 2020. Plans of building as many as 5 new refineries seem to be on course too.  For example, the construction of a refinery jointly built with the Venezuelan state owned oil major PDVSA is well on course. It will process crude predominantly produced in the Marlim basin. Petrobras also plans to pump in another 224 billion dollars by 2014 to boost its upstream and downstream operations.

Exports

Brazil is expected to be the largest producer of crude oil in Latin America before 2015. Crude output is expected to reach 3.9 million b/pd by 2020. Most of this is expected in the offshore Campos and Santos basins. Brazil exports the majority of its oil to the US which buys 45% of it; this is expected to continue in the coming years despite the fact that US will increase its share of imports from the Middle East, in particular from Iraq and Saudi Arabia. The next biggest market is Asia accounting for over 30% of Brazilian crude oil exports with China and India being the most important. At present Indian private refiners Essar and Reliance are the major buyers, but PSU’s (Public Sector Undertakings) are expected to join them soon making India a very important market. It is estimated that in the future supplies to India and China will increase substantially, although exports to China will be significantly higher to any other Asian country.  

As new oil is discovered the Brazilian government is looking for capital for investment from foreign oil majors. All the global energy giants Shell, Chevron, Exxon-Mobil, Repsol, Indian and Chinese nationalized oil companies already have major stakes in the country’s oil and gas markets and are expected to continue and consolidate their investments and in turn their interests in the future.  Chinese government backed oil companies have a major advantage at present. The Chinese government offers loans for E&P (Exploration & Production) activities and in return is guaranteed shipments of oil on continual basis. Such loans provide China an edge over competitors and have proved to be a decisive blow in many cases in order to win major oil contracts. The best example for this was the $10 billion loan given to Petrobras in return for 200,000 b/d of oil for the next decade. The three Chinese oil majors CNPC (China National Petroleum Corporation), Sinopec and CNOOC (China national Offshore Oil Corporation) are going all out to secure supplies. Not only have the Chinese bought-up stakes of other companies such as Galp, it has also formed strategic joint ventures for oil equipment with Brazilian companies. CNPC’s BOMCO (Baoji Oilfield Machinery Co., Ltd), China’s largest oil equipment manufacturing and R&D have linked up with oil service providers recognized by Petrobras as one such example. Although the country’s oil reserves are increasing as indicated, growth rates may be unnecessarily hindered by Petrobras’ limitations as an overstretched company.   The European debt crisis is only going to add to the list of problems for further exploration as investors will try to limit risk by restricting investments. Concurrently Petrobras by law must have a 30% stake in any new project which only complicates matters. In short, Brazil’s oil boom will continue into the future albeit at a slower pace. 

Back to refinery expansion
Currently there is a huge deficit between existing refining capacity and the amount of heavy crude oil produced. New units have to be setup if the crude produced by domestic oil wells is to be refined locally. The country has already started to increase its hydrotreating and coking capacities in a massive way to generate more value out of a barrel. The majority of Brazil’s refineries are equipped with FCCU (Fluidized Catalytic Cracking Units) to cater to gasoline production. Installation of coking units is also on the rise to increase and further refine the bottoms products (asphalt, bitumen and heavier hydrocarbons), which is completely lacking in the country’s majority of refineries.  The next wave of refineries has been designed to ensure the heaviest sweet, high TAN and heavy sour, high TAN crude oil can be processed. Brazil eventually would like to process and export distillates besides meeting its domestic consumption in order to enhance its profit margins and to reduce its dependence on supplies from the Middle East, Asia and other African countries.  This is despite the fact that the major suppliers for crude as well as distillates for Brazil are South American nations, primarily Venezuela and Columbia. In addition to this, Brazil is also planning to setup and expand its petrochemical complexes. The petrochemical complex in Rio is pegged to be one of the largest in the world and would refine local heavy crude. Coming to distillates, its naphtha imports have risen due to the start-up of olefin plants recently and are expected to grow. Argentina and Algeria are the major naphtha suppliers. With diesel demand expected to grow, due subsidies and a decreasing market for gasoline, a number of hydrocracking and hydrotreating units are under way to meet higher demand for this product. With mandatory specification by the government to control sulfur; a number of hydrotreating units are being set up. Merox (UOP proprietary technology) is being used to contain sulfur content in a number of distillates produced from  heavy sour crude oil to meet international standards and government specifications.

Importance of the South Atlantic
With reference to other countries in South America, Argentina is the second largest economy on the continent. Argentina has leading reserves of high quality shale hydrocarbons and is expected to increase its cooperation with the country to cater to its energy needs. According to US EIA, Argentina boasts the world’s third largest reserves of shale gas which US interests are closely monitoring. 

There is another issue that has its relevance for South Atlantic oil and that is Argentina and the history of what Argentinians call the “occupation of Falkland Islands by the British.” A war has already been fought over these islands in 1982.  But recently they have become even more important as massive oil reserves have been found offshore. Britain with its dwindling reserves in the North Sea is desperately looking forward to securing its supply from the region. Investment of over $150 million has already been committed by the British and is expected to increase considerably. With one rig already present in the north, the 2nd oil rig to reach the Falklands is expected to drill wells in the east and south east of the island. Britain has already mobilized its troops for any suspected tensions or blockade of the Las Malvinas (Falklands). The drilling of new wells is expected to be started in 2012. Almost all major economies in South America support Argentina’s claim to the Falklands. Brazil too is a vivid supporter .It has even said that if Brazil had nuclear submarines at that time of last war the outcome would have been entirely different. It seeks cooperation with Argentina on oil and considers it as a major ally for the future of its energy needs. Thus any interference with the country would have a direct and strong impact on Brazil’s interests. The matter has been already taken to the UN Security Council. It has been noted that China supports the Argentinians claim for the islands. This is an important development as no Security Council member has so far supported their claims.

With the Atlantic Basin having massive future implications for future oil and gas reserves, it is critical for governments to strategically ensure that their country is in the forefront of any such development taking place in the region. Control of the basin could ensure that countries in the region would have a dedicated supply of oil for the future not only for domestic consumption and securing energy needs, but also for export and boosting their economies which are still developing. The UN Law of the Sea treaty so far has been adhered to by the Brazilian and neighboring governments, but as exploration continues in the deep seas a conflict of interests amongst countries may gain relevance. So ensuring a strong navy for many is critical for a swift strategic response. Responding to the strengthening of navy, the Americans too have realized the importance of the South Atlantic. They have commissioned the US Naval 4th fleet in 2008 which is fully functional today to ensure smooth movement of crude across the Atlantic. For Brazil, it imports light sweet crude from Angola, Guinea and Nigeria and at the same time exports crude to the US, China and other Asian and European nations through this ocean. Ensuring the secure and swift movement of crude oil and gas is not only beneficial to the country but to other nations which import these supplies.

Conclusion
Brazil is one of the fastest growing economies in the world recently exceeding the GDP of the United Kingdom primarily due to export of the new found oil reserves in the South Atlantic. It is expanding its economic cooperation not only with its traditional allies like the US but also with emerging powers to the east primarily India and China along with Russia and other Central Asian countries. Oil will continue to play a vital role in shaping diplomatic relations and in ensuring its dominance in the world. Not only does Brazil seek to secure its own energy supply, but it will become instrumental in maintaining global crude oil supply and price stability. At a time when there is a nuclear crisis in Iran, unrest in Iraq and a monopoly of OPEC over major crude supplies, Brazil can help provide the world the oil it needs. Although demand forecasts for crude oil are projected as low as 1% worldwide, with oil demand in the US and EU flat, Brazil seems to be poised for robust growth in its oil sector. With markets expected to remain tight, oil prices are expected to hover around the $100 mark and the impact of Brazilian crude in the international market is going to be far greater than it has been in the past.

Contributor Aditya Malhorta is a Field Service Advisor at UOP India Private Ltd.,A Honeywell Company and the views expressed in this article are exclusively those of the author.

Brazil, new kid on the block (Aditya Malhorta)

Brazil's Oil Future: The New (Big) Kid on the Block

THURSDAY, 19 APRIL 2012 00:00 ADITYA MALHOTRA

In a noisy revolution that has announced the arrival of the BRIC countries over the past decade, Brazil quietly emerged in 2011 as the world’s sixth largest economy, the ninth largest consumer of energy and the the seventh largest consumer of oil.  It has also emerged as one of the most influential and rapidly growing economies in the world. Already the South American continent’s powerhouse, Brazil alone accounts for over 40% of the region’s GDP influencing if not determining the direction of development across the continent.  At a time when economies around the world are struggling, Brazil's economy is forecasted to continue remarkable growth. driven in part by its oil and gas sector  which, if realized, would allow it to emerge as a global leader for the first time in crude oil production.   

Crude oil prospects 

The country’s energy policies for the last decade have been significant for the production and development of natural resources, crude oil and gas in particular. Brazil has transformed itself from a major oil importer to an exporter of crude oil. Post 2003, the country followed an aggressive ethanol blending policy. As a national policy, Brazil blends sugarcane-derived alcohol with gasoline rendering an ethanol fuel blend of between 20% -25% [ethanol] based on the country’s sugarcane harvest. Though having less energy per unit volume than gasoline, the cost economics of ethanol, combined with its high octane rating and environmental advantages, make ethanol an important element in Brazil’s energy matrix.  Eighty percent of the cars today in Brazil can run on blended fuel making the country the world’s second largest producer of ethanol while concurrently reducing its consumption of traditional fuels to a great extent.

Critical to changing Brazil’s oil consumption pattern were low taxes on ethanol as a fuel compared to other liquid fuels, providing a minimum support price for sugarcane produced, and investment in research and development.  The country’s ethanol policy along with new found oil transformed Brazil from being oil self-sufficient in 2006 to becoming a net oil exporter in 2009 and as  a result one of the largest non-OPEC oil producers globally. The country’s energy demand is unexpectedly projected to grow steadily in the coming years. To ensure its energy needs, Brazil has progressively initiated an aggressive exploration and production policy for securing oil and gas reserves along its waters in the South Atlantic. The development of major projects in this area has resulted in increasingly large outputs of crude oil, shale oil and gas as well as oil derived from oil sands.

 

 

 

According to the US EIA, Brazil was the largest producer of liquids in South America in 2010. The reserves discovered are so huge that it is expected that the production decline in Venezuela and Mexico would be offset by Brazil to a great extent. With Venezuela’s socialist government increasing its cooperation with China and other Asian nations, and while the US government at the same time is losing production volumes from its traditional ally México, imports from Brazil could play a vital role in shaping the demand and supply balance in the region. New and major discoveries have been taking place in the Campos and the Santos Basin.

 

Map of the Campos and Santos Basin

 

 

 Source: Energy Information Administration 

 

 

The Campos Basin consisting of areas such as Frade, Papa Terra, Roncador and Peregrino are already producing or set to come on-stream soon. The Santos Basin has even larger reserves. The major oilfields located at Tupi, Iara and Guara should reach full scale production post-2015.Some estimate that the oil fields, located off Brazil's southeast Atlantic coast beneath kilometers of ocean and bedrock, contain more than 100 billion barrels of high-quality recoverable oil.

 

 

To ensure the security of its oil, different Brazilian regimes over time have stressed strengthening the country’s defense and naval capabilities.  Its fleet is expanding as Brazil moves to protect key assets in deep waters. Contracts with Britain have already been signed to provide the country with three patrol vessels to secure offshore sites and oil installations. It has been underlined that one of the key components of the National Defense Strategy unveiled in 2008 is to protect the nation’s deep water oil and gas reserves to avoid any disruption in ongoing exploration and production activities. The country has already commenced its nuclear submarine program with technology transfer from France and it is expected that by 2016 Brazil will boast the continent’s largest Navy. The addition of a nuclear submarine would make it make an undisputed power in the region. A strong naval defense fleet would make its influence and dominance even more prominent in the South Atlantic, with no country around to match its power.

Type of crude

Petroleum products including natural gas account for over 50% of the country’s total energy use. Almost all of Brazil’s production comes from Brazil’s offshore rigs which produce heavy sour and heavy sweet crude with a high degree of TAN (Total Acid Number). This requires refineries to be equipped with advanced technologies which translates into a significant refinery complex in order to refine and process various crudes. The refineries in Brazil were initially designed to refine light sweet crude, but with the discovery of new heavy sour crude, existing refineries are being revamped and expanded. This is the prime reason that despite having an abundance of reserves Brazil still imports its oil from countries producing light sweet crude. Construction of new advanced refineries and petrochemical complexes are also taking place on an enormous scale with capacities that are unprecedented in the country.

Brazil’s refinery complex

Brazil has 13 refineries. The Petrobras supply chain [the national oil company] accounts for almost 6% of the country’s GDP. The company currently operates 11 of the country’s 13 refineries with a capacity of over 2 million b/d in 2010. The refining capacity is expected to reach 3.2 million b/d by 2020. Plans of building as many as 5 new refineries seem to be on course too.  For example, the construction of a refinery jointly built with the Venezuelan state owned oil major PDVSA is well on course. It will process crude predominantly produced in the Marlim basin. Petrobras also plans to pump in another 224 billion dollars by 2014 to boost its upstream and downstream operations.

Exports

Brazil is expected to be the largest producer of crude oil in Latin America before 2015. Crude output is expected to reach 3.9 million b/pd by 2020. Most of this is expected in the offshore Campos and Santos basins. Brazil exports the majority of its oil to the US which buys 45% of it; this is expected to continue in the coming years despite the fact that US will increase its share of imports from the Middle East, in particular from Iraq and Saudi Arabia. The next biggest market is Asia accounting for over 30% of Brazilian crude oil exports with China and India being the most important. At present Indian private refiners Essar and Reliance are the major buyers, but PSU’s (Public Sector Undertakings) are expected to join them soon making India a very important market. It is estimated that in the future supplies to India and China will increase substantially, although exports to China will be significantly higher to any other Asian country.  

As new oil is discovered the Brazilian government is looking for capital for investment from foreign oil majors. All the global energy giants Shell, Chevron, Exxon-Mobil, Repsol, Indian and Chinese nationalized oil companies already have major stakes in the country’s oil and gas markets and are expected to continue and consolidate their investments and in turn their interests in the future.  Chinese government backed oil companies have a major advantage at present. The Chinese government offers loans for E&P (Exploration & Production) activities and in return is guaranteed shipments of oil on continual basis. Such loans provide China an edge over competitors and have proved to be a decisive blow in many cases in order to win major oil contracts. The best example for this was the $10 billion loan given to Petrobras in return for 200,000 b/d of oil for the next decade. The three Chinese oil majors CNPC (China National Petroleum Corporation), Sinopec and CNOOC (China national Offshore Oil Corporation) are going all out to secure supplies. Not only have the Chinese bought-up stakes of other companies such as Galp, it has also formed strategic joint ventures for oil equipment with Brazilian companies. CNPC’s BOMCO (Baoji Oilfield Machinery Co., Ltd), China’s largest oil equipment manufacturing and R&D have linked up with oil service providers recognized by Petrobras as one such example. Although the country’s oil reserves are increasing as indicated, growth rates may be unnecessarily hindered by Petrobras’ limitations as an overstretched company.   The European debt crisis is only going to add to the list of problems for further exploration as investors will try to limit risk by restricting investments. Concurrently Petrobras by law must have a 30% stake in any new project which only complicates matters. In short, Brazil’s oil boom will continue into the future albeit at a slower pace. 

Back to refinery expansion
Currently there is a huge deficit between existing refining capacity and the amount of heavy crude oil produced. New units have to be setup if the crude produced by domestic oil wells is to be refined locally. The country has already started to increase its hydrotreating and coking capacities in a massive way to generate more value out of a barrel. The majority of Brazil’s refineries are equipped with FCCU (Fluidized Catalytic Cracking Units) to cater to gasoline production. Installation of coking units is also on the rise to increase and further refine the bottoms products (asphalt, bitumen and heavier hydrocarbons), which is completely lacking in the country’s majority of refineries.  The next wave of refineries has been designed to ensure the heaviest sweet, high TAN and heavy sour, high TAN crude oil can be processed. Brazil eventually would like to process and export distillates besides meeting its domestic consumption in order to enhance its profit margins and to reduce its dependence on supplies from the Middle East, Asia and other African countries.  This is despite the fact that the major suppliers for crude as well as distillates for Brazil are South American nations, primarily Venezuela and Columbia. In addition to this, Brazil is also planning to setup and expand its petrochemical complexes. The petrochemical complex in Rio is pegged to be one of the largest in the world and would refine local heavy crude. Coming to distillates, its naphtha imports have risen due to the start-up of olefin plants recently and are expected to grow. Argentina and Algeria are the major naphtha suppliers. With diesel demand expected to grow, due subsidies and a decreasing market for gasoline, a number of hydrocracking and hydrotreating units are under way to meet higher demand for this product. With mandatory specification by the government to control sulfur; a number of hydrotreating units are being set up. Merox (UOP proprietary technology) is being used to contain sulfur content in a number of distillates produced from  heavy sour crude oil to meet international standards and government specifications.

Importance of the South Atlantic
With reference to other countries in South America, Argentina is the second largest economy on the continent. Argentina has leading reserves of high quality shale hydrocarbons and is expected to increase its cooperation with the country to cater to its energy needs. According to US EIA, Argentina boasts the world’s third largest reserves of shale gas which US interests are closely monitoring. 

There is another issue that has its relevance for South Atlantic oil and that is Argentina and the history of what Argentinians call the “occupation of Falkland Islands by the British.” A war has already been fought over these islands in 1982.  But recently they have become even more important as massive oil reserves have been found offshore. Britain with its dwindling reserves in the North Sea is desperately looking forward to securing its supply from the region. Investment of over $150 million has already been committed by the British and is expected to increase considerably. With one rig already present in the north, the 2nd oil rig to reach the Falklands is expected to drill wells in the east and south east of the island. Britain has already mobilized its troops for any suspected tensions or blockade of the Las Malvinas (Falklands). The drilling of new wells is expected to be started in 2012. Almost all major economies in South America support Argentina’s claim to the Falklands. Brazil too is a vivid supporter .It has even said that if Brazil had nuclear submarines at that time of last war the outcome would have been entirely different. It seeks cooperation with Argentina on oil and considers it as a major ally for the future of its energy needs. Thus any interference with the country would have a direct and strong impact on Brazil’s interests. The matter has been already taken to the UN Security Council. It has been noted that China supports the Argentinians claim for the islands. This is an important development as no Security Council member has so far supported their claims.

With the Atlantic Basin having massive future implications for future oil and gas reserves, it is critical for governments to strategically ensure that their country is in the forefront of any such development taking place in the region. Control of the basin could ensure that countries in the region would have a dedicated supply of oil for the future not only for domestic consumption and securing energy needs, but also for export and boosting their economies which are still developing. The UN Law of the Sea treaty so far has been adhered to by the Brazilian and neighboring governments, but as exploration continues in the deep seas a conflict of interests amongst countries may gain relevance. So ensuring a strong navy for many is critical for a swift strategic response. Responding to the strengthening of navy, the Americans too have realized the importance of the South Atlantic. They have commissioned the US Naval 4th fleet in 2008 which is fully functional today to ensure smooth movement of crude across the Atlantic. For Brazil, it imports light sweet crude from Angola, Guinea and Nigeria and at the same time exports crude to the US, China and other Asian and European nations through this ocean. Ensuring the secure and swift movement of crude oil and gas is not only beneficial to the country but to other nations which import these supplies.

Conclusion
Brazil is one of the fastest growing economies in the world recently exceeding the GDP of the United Kingdom primarily due to export of the new found oil reserves in the South Atlantic. It is expanding its economic cooperation not only with its traditional allies like the US but also with emerging powers to the east primarily India and China along with Russia and other Central Asian countries. Oil will continue to play a vital role in shaping diplomatic relations and in ensuring its dominance in the world. Not only does Brazil seek to secure its own energy supply, but it will become instrumental in maintaining global crude oil supply and price stability. At a time when there is a nuclear crisis in Iran, unrest in Iraq and a monopoly of OPEC over major crude supplies, Brazil can help provide the world the oil it needs. Although demand forecasts for crude oil are projected as low as 1% worldwide, with oil demand in the US and EU flat, Brazil seems to be poised for robust growth in its oil sector. With markets expected to remain tight, oil prices are expected to hover around the $100 mark and the impact of Brazilian crude in the international market is going to be far greater than it has been in the past.

Contributor Aditya Malhorta is a Field Service Advisor at UOP India Private Ltd.,A Honeywell Company and the views expressed in this article are exclusively those of the author.