Brazil's Subsalt Discoveries - Offshore Brazil Emerges as a Leading Investment Destination for Global Oil and Gas Companies
Brazil's Subsalt Discoveries - Offshore Brazil Emerges as a Leading Investment Destination for Global Oil and Gas Companies
Report Reserve announces inclusion of a new market research report to its premium store.
GlobalData's new report "Brazil's Subsalt Discoveries - Offshore Brazil Emerges as a Leading Investment Destination for Global Oil and Gas Companies" analyzes Brazil's subsalt discoveries, which have transformed Brazil's offshore region into one of the most attractive upstream investment destinations globally. The report details the different subsalt basins in Brazil and analyzes the major discoveries in the different subsalt basins of the country. The report also details the present fiscal laws in the country and the proposed new legislation in light of the recent subsalt discoveries. It also details the competitive landscape in the subsalt region analyzing the major companies operating in the region. The report provides details of the major challenges in developing the subsalt basins, capital requirements and investments in the basins during 2010-2020. Finally, the report analyzes the effect of increasing oil and gas production from the subsalt basins on the future of Brazil's oil and gas industry.
Subsalt Development Catapults Brazil among the Top Oil Exporters Globally
Rapid increase in subsalt production in Brazil will allow the country to emerge as a major oil exporter by 2020. Brazil's oil production is expected to reach approximately 5.2 million barrels per day (bpd) by 2020, making the country one of the top five oil exporters globally. A large part of this production increase is expected to come from the subsalt basins. The total subsalt oil production in Brazil is expected to reach 1.8 million bpd in 2020.
The figure below details the increasing oil exports from Brazil.
Brazil, Increasing Oil Exports (Thousand Barrels Per Day), 2000-2020
Source: GlobalData/Petrobras
The Subsalt Reserves Transform the Future of Oil and Gas Majors
Huge discoveries made in Brazil's subsalt basins have attracted the interest of oil and gas players globally. The subsalt basins are expected to change the future of major oil companies having interest in the basins. The assets are expected to emerge as core assets for the companies in the future.
Petrobras is expected to emerge as one of the largest oil producing companies globally with total oil production reaching 4.3 million bpd by 2020. The total oil production from Brazil is expected to reach 3.9 million bpd by 2020 with approximately 1.2 million bpd coming from subsalt basins. The company expects to become one of the world's five largest publicly traded oil companies.
Petrobras, Oil Production In Brazil (Thousand Barrels Per Day), 2009-2020
Source: GlobalData/Petrobras
International majors with interest in these subsalt finds will also witness rapid growth. BG Group's net production from the interest in recent subsalt discoveries in Brazil is expected to reach approximately 445 thousand boepd by 2020. Repsol and Petrogal also believe that the subsalt assets will prove to be transformational in terms of the future growth of the companies. Anadarko also expects the recent Campos basin discoveries to turn into a "mega-project" for the company.
The New Subsalt Legislation Diminish the Attractiveness of Brazil's Upstream Sector for International Oil Companies
The huge oil and gas finds in the subsalt areas have motivated the Brazilian government to develop a new petroleum regime for the region. The new regime will abandon the concession system and shift to production sharing contracts. Through the new legislation, Petrobras will be granted full ownership of the new subsalt acreage and will be guaranteed a minimum 30% share of any subsalt areas the government decides to tender in licensing rounds.
These legislative changes will diminish the attractiveness of Brazil's upstream sector for international oil companies. The companies already operating in the subsalt areas will continue to operate under existing terms. But the new law significantly reduces the chances of firms without subsalt acreage ever entering this potential region, especially the areas which the government decides have a high chance of exploration success or producing large discoveries.
Even if new companies do secure access to subsalt exploration ventures, they will be unable to control the projects because Petrobras must act as the operator. Also the financial rewards, under the new competitive production-sharing system, will be lower.
The Huge Capital Requirement for the Development of the Subsalt Region Remains a Major Hurdle
The technological challenges in the development of subsalt reserves, the impediments in getting the produced oil and gas from deep offshore to onshore areas have made the development of these reserves capital intensive. It is estimated that the development of oil from these fields could entail investment of up to $400 billion.
With Petrobras being the fore-runner in the subsalt area development in Brazil, a major part of this investment is expected to come from the company. Petrobras intends to spend approximately $111.4 billion in the development subsalt basins in the country. The estimated investments on subsalt region are expected further increase in the 2010-2014 capital program.
The company is looking at different financing options to fund its ambitious investments program. The $10 billion loan for oil agreement with China in May 2009 was a major step in this direction.
Petrobras, Subsalt Capital Expenditure Through 2020 ($ Billion)
Source: GlobalData/Petrobras
In addition, major international oil companies operating in the subsalt areas are also expected to invest a considerable amount in the development of reserves during 2010-2020. Over the next ten years, BG and Repsol together are expected to spend approximately $35 billion in the development of the Brazilian subsalt reserves. For more details, please vist http://www.reportreserve.com/reportdet.php?company=GlobalData&reportid=10098
http://www.articlesbase.com/press-releases-articles/brazils-subsalt-discoveries-offshore-brazil-emerges-as-a-leading-investment-destination-for-global-oil-and-gas-companies-4446053.html Global Orthopedic Devices Pipeline Landscape: Analysis of Key Upcoming Products and Technologies Step-By-Step Guide to Global Company Setup Global Market for Bioinformatics to touch $2.4 billion in 2011 Global Communication Makes a Smaller World Mustang UK Buyer Guide for shipping a Mustang to the UK for import Car Shipping Quote - Use This Decision Making Tool Before Hiring Any Company Libya oil faces steep hurdles before return to global markets Four Ways The U.s. Economy Is Setting Trends For Irs Deductions Principal Investment for Global Trader's Market Trading Strategy What You Need to Consider before Purchasing Nursing uniforms The global shopper: Consumer behaviour and your online store Share values influence the economy...a myth resolved Prom Is Not Merely On The Subject Of Purchasing Sherri Hill Prom Outfits