Brazil's Petrobras looks overseas to cut oil import costs
Aug. 5, 1998 Brazil's Petrobras hopes to cut its $ 5 bn yearly price tag on oil imports by expanding its own overseas exploration and production presence, company president Joel Renno said.
"We are already operating in 13 countries and we want to be in 20 countries by the end of next year," he said, adding that Brazil currently buys some 70,000 bpd from locations as diverse as Angola, Bolivia, Argentina, Colombia, the Gulf of Mexico and the North Sea.
Brazil's $ 5 bn oil import spending covers 38 % of its crude oil needs.
Petrobras is also reported to have teamed up with UK independent explorer LASMO Plc for a share in Azerbaijan's latest offshore development.
Even with an expected growth in consumption of between 6 - 7 %, Brazil still plans to cover up to 70 % of its domestic needs by the end of the century with raised output, Renno said.
Petrobras aims to increase oil production to 1.2 mm bpd by next year, up from about 1.0 mm bpd now, and 1.5 mm bpd by the end of the decade.
In
1996, Argentina exported some 150,000 bpd to Brazil but the volume now fluctuates between 100,000 and 105,000 bpd. OPEC member Venezuela provides 140,000 bpd, while other OPEC production comes from Nigeria (120,000 bpd) and Saudi Arabia (90,000 bpd), Renno said.
Renno said he expected Argentina to regain its status as Brazil's chief oil supplier by the end of 1998, or early 1999.
"Some of our Argentine suppliers had difficulties renewing their contracts, so we started to buy more from Nigeria," he said. Brazil also buys oil from Iran, Qatar and Kuwait.
"From now we expect Argentina will return to be number one (supplier) but it will depend on prices and general conditions."
The 2 Mercosur neighbours are already partners in various projects to produce oil and natural gas.
Much of Brazil's own reserves, estimated at 14 bn barrels, are unexplored. But with the breaking of Petrobras' industry monopoly, recent industry restructuring is expected to encourage foreign partnerships and bring in
capital investment necessary to spur domestic development.
National Petroleum Agency (ANP) opened up some of the state giant's fields for exploitation by foreign companies, allowing them to produce oil in Brazil either through concession contracts for the newly opened areas or as operators in joint ventures with Petrobras.
Soon the ANP is expected to issue authorisations to foreign operators to import petroleum products such as naphtha, diesel and jet fuel, maybe as soon as this year.
This could mean Petrobras, which currently provides local consumers with nearly all required petroleum products, would probably reduce its overall petroleum imports, Renno said.
