Brazilian Oil Production To Top Mexico's and Venezuela's: PBR

Brazilian newspaper O Estado de Sao Paulo reports today that Brazilian oil production will surpass that of Mexico and Venezuela by 2011.

"A change in the hierarchy of the oil in Latin America is underway, as the production in Brazil is close near to surpassing energy powers Mexico and Venezuela. While these two countries have seen their production drop dramatically in recent years, Brazil's has been following a steady rise, and it will only accelerate as oil fields in deep-sea begin to produce in the coming months.

Current trends indicate that Brazil may rise to the top of the list until 2011. Traditionally, high oil production caused state-owned enterprises in Mexico and Venezuela to become complacent in the search for new sources of energy, said David Shields, an independent energy analyst in Mexico City. "Basically, the reason is that Brazil had to deal with a crisis and Venezuela and Mexico have never had," he said.

Petrobras

The Brazilian company Petrobras has also received a harsh lesson in the free market economy, which forced the company to improve its efficiency. Petrobras had to adapt when the former President of Brazil Fernando Henrique Cardoso opened the oil sector of Brazil, traditionally a monopoly of Petrobras, to competition from private companies in the mid-1990s. The result was a wave of exploration, which made the production rise by about 50% since 2000. Petrobras, which accounts for more than 95% of the country's production, or just over 2 million barrels of oil per day in October this year. If combined natural gas and the company's operations outside of Brazil, Petrobras's daily production was about 2.6 million barrels of oil equivalent per day, up 5.5% compared to October 2008.

The trend is that the crude oil production in Brazil continues to rise, as fields in the pre-salt regions begin to produce. Petrobras is targeting a domestic production of 2.25 million barrels of oil per day in 2010, expected to grow to 2.43 million in 2011 and 2.58 million in 2012.

Yesterday, the U.S. Anadarko Petroleum and Devon Energy said that their joint projects in Brazil found oil for the second time in the pre-salt region of the Campos Basin. Brazil has also highlighted the Tupi field, which is the largest oil discovery in the Western Hemisphere since the Cantarell field in Mexico in 1976. It is estimated that Tupi has between 5 billion and 8 billion of oil equivalent. The pilot production will yield about 120,000 barrels per day in just over a year. "
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