Posts Tagged ‘oil’

Brazil Oil Update

April 9, 2010

China Showing Interest in Brazil’s Oil

Chinese energy companies will likely participate in bidding for Brazil’s offshore subsalt oil reserves when auctions begin and are already seeking to buy stakes in existing oil projects.

Chinese President Hu Jintao plans to visit Brazil next week to strengthen ties with Brazil as it taps tens of billions of barrels in the offshore subsalt province that has become a new frontier for petroleum exploration.

Auctions for the subsalt blocks have been yet been scheduled because Congress is still discussing new rules for companies investing projects there, part of an attempt by President Luiz Inacio Lula da Silva to boost state control over those areas.

Chinese companies are also interested in investing in refineries and biofuels projects, possibly allowing them to import finished motor gasoline that is already blended with ethanol.

Chinese companies have been insistent on being majority shareholders in new joint ventures, which would prevent them taking part in projects with state oil company Petrobras that are already in development.

Brazil’s 11th bidding round for oil blocks, which includes onshore and shallow water projects but not subsalt blocks, will likely not take place until 2011.

Petrobras Finds Light Oil in New Tupi Well

Brazil’s oil giant Petrobras said on Wednesday it found light oil in a new well that confirmed its estimate of 5 billion to 8 billion barrels in the Tupi offshore field.

The oil field is part of the country’s massive offshore subsalt area, which Brazil hopes will turn it into a major player in energy markets.

The new well, known as Tupi OW, is located at a depth of 2,131 meters (7,000 feet) and is 270 km (167 miles) from the coast of Rio de Janeiro.

Petrobras holds a 65 percent stake in Tupi, Britain’s BG Group has a 25 percent stake and Portugal’s Galp has10 percent.

For relocation to Rio de Janeiro, visit

Rio Battles Over Brazil’s Oil

March 25, 2010

The debate over Brazil’s oil riches is heating up.

The lower house of Brazil’s Congress voted last week to split the portion of the country’s royalties from oil revenues that go to Brazil’s states equally among the states. The vote is part of a broad overhaul of the nation’s oil laws being undertaken due to huge offshore oil discoveries that occurred over the past three years. This vote came as an outrageous blow to the state government of Rio de Janeiro, Brazil’s biggest oil-producing region.

If the bill becomes law, Rio and other oil-producing states will only earn a fraction of the royalties they once expected. Rio’s annual oil revenue would fall to about $134 million from about $4.3 billion, state officials said.

Sérgio Cabral, Rio’s governor, is not giving up without a fight. Cabral called the vote in Congress a “lynching” and contended that it was unconstitutional. He said promised public works projects for the 2014 soccer World Cup and the 2016 Olympics in Rio could be endangered by a sudden drop in revenues, although the federal government has pledged to back Rio’s Olympic effort.

Gov. Cabral organized a large march through Rio’s streets on Wednesday afternoon to protest the move by Congress. Tens of thousands of people, many of them state employees who had been given the day off, showed up despite the heavy rains, with many arriving on buses from all over the state.

“No one has the right to take away that which nature has put within the limits of Rio de Janeiro,” Carlos Lupi, Rio’s labor minister, said in a speech at the march and rally.

The government is seeking to alter the Brazil’s oil laws to centralize control over future oil revenues in the federal government’s hands. The new region is estimated to hold more than five billion barrels of crude oil and could transform Brazil into a global oil power.

Although the bulk of the oil will not be drilled for least four years, President da Silva and his allies in Congress are pushing to get a series of four oil-related laws passed before Congress goes into recess in June or July.

The bills would attempt to make the Brazilian national oil company, Petrobras, the operator of all future oil discoveries from the new region, known as the presalt region. They would also include the capitalization of Petrobras, a stock issuance expected to be valued at more than $50 billion.

With what could be hundreds of billions of dollars at stake over decades, the proposed bills have become extremely contentious in Congress, where opposition politicians are seeking to stall a full vote on the bills until after the presidential election in October.

The proposals on oil reform and the issuance of stock in Petrobras came under a cloud last week when two members of Congress from states that do not produce oil, Ibsen Pinheiro and Humberto Souto, proposed the idea of equally distributing the portion of royalties from oil revenues that go to states and municipalities. This would include both past and future oil developments. The lower house approved the proposal 369-72.

The federal government receives about 40 percent of the nation’s oil royalties, and most of the rest currently goes to the oil-producing states.

Analysts said they expected that Mr. da Silva would eventually veto any bill that included a radical redistribution of royalties. However, faced with the presidential election in the fall, in which he is trying to transfer his huge popularity to his chosen successor, Dilma Rousseff, his chief of staff, the president has been treading softly on the proposed redistribution.

For information on relocation to Rio de Janeiro, visit

The Argentina Oil Conflict: Why it’s not the Next Brazil

March 5, 2010

The recent diplomatic battle between Argentina and Britain over drilling for oil off the coast of the Falkland Islands/ Malvinas has opened wounds nearly three decades old for many Argentines. Political analysts and energy consultants also claim that post-war sentiments isn’t the only reason for Argentina’s troubles, and that perhaps many problems may be the country’s government’s own making.

While many Argentines feel embarrassed over the failed war with the British over the Falklands/ Malvinas in 1982, and consequently feel embarrassment over Britain’s claim of ownership over the oil, it appears that many are resigned to the situation. Argentina is already envious of Brazil’s huge oil discoveries over the past three years, and this is just another blow to the country’s spirit. An October poll by Ibaro metro consultancy found about 80% of respondents thought Argentina’s claim on the islands was important.

Argentina’s leftist President Cristina Kirchner has denounced Britain before the U.N. and other international forums, and diplomatic tensions between the two countries have risen to perhaps the highest level since the war. Although anger has been expressed, neither President Kirchner nor any other government representative has mentioned that no oil-drilling rigs are operating in Argentina’s own expansive waters, largely because many oil companies are wary of working in Argentina these days, analysts say. Furthermore, neither country has given up on its sovereignty claims, and a rig for a British company arrived off the Falklands/ Malvinas this week to begin drilling.

Polls show Argentines weary of Mrs. Kirchner’s autocratic style and populist economic policies. In the last year alone, her government has nationalized the country’s largest airline, seized billions of dollars in private pension funds and now is trying to tap more than $6.5 billion in currency reserves to pay long-overdue foreign debt. Argentina also has a system of export taxes that has kept domestic oil prices low, and that has dissuaded some of the larger oil companies from investing in offshore exploration.

Energy consultants say that because Argentina doesn’t have stable rules and prices that make offshore investment profitable, companies are exploring other geological regions. Analysts agree that there are very few companies exploring the Argentine sea, and that there should be a lot more.

President Kirchner’s government has claimed the British have violated Argentine sovereignty and threatened to make life tough for oil ships passing through Argentine waters. Argentina also complains the British government does not have the right to unilaterally exploit resources in the “disputed” waters around the Falklands/ Malvinas without first consulting or obtaining approval from Argentina’s government.

Its neighbors have defended Argentina’s claims. President Luiz Inácio Lula da Silva of Brazil criticized the United Nations on Tuesday for not forcing the British to negotiate.

Argentina has been producing oil for more than a century but has not found anywhere near the billions of barrels of oil that Brazil and its foreign partners have discovered around Rio de Janeiro since 2007. Brazil has become an huge economic power, partly due to the recent oil discoveries, and mostly in part to it’s government’s policies.

For relocation to Rio, visit Rent in Rio.

Rio Oil Rush: Relocation and Real Estate

February 19, 2010

With the recent oil rush in Brazil, Rio de Janeiro has emerged as one of the most sought after destinations for corporate relocation. However, relocation in any case always involves lots of time, energy and money in finalizing a suitable apartment alone. The demand for rental apartments and corporate relocation agencies in Rio is soaring high. Even the corporate relocation agencies are doing their best to offer state-of-the-art-facilities to their customers and be visible in their business. One such agency, with an office in New York City, which has carved a niche for itself in catering the rental apartments in Rio, is Rent In Rio. 

“Our relocation specialists will assist you in every step of the whole relocation procedure: finding suitable schools for the children, Portuguese lessons for the family, to hiring a car for yourself whilst you are getting to know our marvelous city. Our agency will also gladly assist you in finding suitable temporary or long term accommodation and will walk you through all the necessary paperwork and documentation that is required,” says Daniel Babush, President of Rent in “ We have Studios, 1,2,3,4 and 5 Bedroom apartments as well as penthouses. We can assist with temporary and long-term rentals whether furnished or unfurnished. We have successfully relocated numerous employees from oil companies, the diplomatic community and other blue chip companies.” Babush says.

Rodrigo de Azeredo Santos, head of Brazil’s Trade Promotion Programs Division of the Ministry of External Relations has said in an interview that Brazilian oil reserves, biofuels and availability of hydroelectric power generation are added guarantees that Brazilian property investment is safer due to the assurance that energy will be available to sustain the economic growth. The oil discoveries are so important for property investors in Brazil as similar oil boom in Dubai and Norway have regularly seen their property market post record price increases annually.

Brazil’s property market is now in good shape for overseas investors. According to Jose C. Santiago, licensed and certified attorney of law in Brazil in his portal has stated that the country is a buyer’s market, with low prices because there are more homes for sale than there are buyers. The demand for property in Brazil is expected to increase by approximately 900,000 units each year.

Overseas investors looking for good property returns with relatively low-entry costs may consider investing in Brazil following the oil discovery, which may strengthen the country’s economy and in turn raise property prices. Business week has reported that Brazil is a smart place to invest. It is a self-reliant country on the energy front, a position that has been further strengthened by the recent discovery of new oil fields.

Brazil Oil Update

February 12, 2010

Brazil OGX sees up to 900 million barrels in OGX-3 well

Brazilian oil start-up OGX (OGXP3.SA) said Wednesday it estimated recoverable oil reserves from its OGX-3 well at 500 million to 900 million barrels.

This is OGX’s second announcement of drilling tests from its offshore wells this week. On Monday, it said recoverable reserves from drilling at the OGX-4 well were seen at 100 million to 200 million barrels.

The OGX-3 well in the BM-C-41 concessionary block in the Campos basin off Rio de Janeiro’s coast has a productive potential of 3,000 barrels a day (bpd), the company said in a market filing.

The vertical well is depth reached 4,084 meters to carbonate rock layers. The sour to medium grade crude from the well is ranked at 19 to 20 degrees on the API scale.

For those in the oil industry looking to relocate to Brazil, contact Rent in Rio.

Brazil’s Unemployment Rate Continues to Drop

December 3, 2009

Brazil’s unemployment rate dipped again in October, this time returning to pre-crisis levels and hinting at a strong rebound ahead for Latin America’s biggest economy.

The jobless rate fell to 7.5% in October, the same as in October a year ago and slightly below forecasts, the Brazilian Census Bureau, or IBGE, said Thursday. Unemployment was 7.7% in September, down from 8.1% in August.

Jankiel Santos, an economist at Sao Paulo’s BES Investimentos fund, said October’s data reinforced the view that “labor market conditions remain quite favorable and should lend a hand to the Brazilian economy to keep on expanding in coming months.”

IBGE October data also showed average real incomes were 3.2% higher than October last year, indicating that the number at work enjoyed higher spending power and could thus more easily contribute to Brazil’s consumer boom.

Cimar Azevedo, IBGE director for employment data, pointed out that the average formal employment rate was 44.9% of the workforce in the January through October period, higher than the 44.4% level in the year-ago comparison.

October’s jobless rate declined for a third consecutive month, pointing to a steady rate of economic recovery, with better prospects ahead in the run-up to Christmas.

Roberto Padovani, chief Latin American strategist for WestLB Bank, predicted a strong rebound for Brazil in 2010, with economic growth reaching 4.8% after a 0.2% decline in 2009. “The expansion expected for next year will be fueled mainly by domestic consumption,” Padovani said.

November and December employment figures will likely be lifted significantly by the festive season, said Azevedo.

Last December the unemployment rate was just 6.8%.

But this year, significant tax breaks on consumer durables along with easier credit facilities and conditions should create even more work, especially in retail.

More employment opportunities are expected to be created in Rio with the upcoming influx of tourism expected to occur in the next few years due to the FIFA World Cup and the 2014 Olympics. Plans to improve upon existing venues and infrastructure as well as new constructions for these events will have a large effect on the economy.

The recent success of Brazilian oil and gas company OGX Petroleo e Gas Participacoes SA is also set to bring many more employment opportunities to the city.

Those looking to relocate to Rio to take advantage of these opportunities, or to book accommodations for any of the upcoming international events the city is set to host, contact Rent in Rio today.

Rio Business Update: Growth on the Horizon

November 12, 2009

Rio De Janeiro Has ‘Biggest Concentration Of Billion Dollars In Investment Per Square Kilometer’

investments by sectorA recent investment study by FIRJAN of Brazil’s Rio de Janeiro found that the area is about to experience a massive influx business investment, one that could rival any other place in the world in terms of dollars per square kilometer.

Although the Olympics will obviously make a large contribution to the economy, it is not the main investor. Reports show that Rio will be driven by Petrobas investment.

The New York Times states: An August 2009 study, “Decision: Rio Investments 2010-2012,” published by the Rio de Janeiro State Federation of Industries, predicted that public and private investment would pump $60.3 billion into the state over the next three years, not counting the additional $14.2 billion budgeted for the 2016 Olympic Games.

“I would dare to say that, probably, we have the biggest concentration of billion dollars in investment per square kilometer in the world,” said Cristiano Prado, the author of the industry federation’s study. “And more will come together with the Olympic Games in the next years.”

If you are relocating to Rio as a result of a business investment and the growing economy, contact Rent in Rio to make your transition to life in Rio a comfortable and enjoyable one and find you an apartment you love.

More Oil Off the Coast of Brazil

Brazilian oil and gas company OGX Petroleo e Gas Participacoes SA (OGXP3.BR) went three-for-three in its drilling campaign Thursday, with another well showing signs of hydrocarbons off Brazil’s coast.

The independent driller said that its 1-OGX-2-RJS well in the BM-C-41 block showed the presence of hydrocarbons. That was OGX’s third discovery since October, a stunning success rate for an oil company that was started from scratch in 2006.

“This new evidence of hydrocarbons confirms the existence of an active prolific system in this area, and contributes to a better understanding of the geological attributes of the region,” OGX CEO Paulo Mendonca said in a statement.

Thursday’s discovery was OGX’s second successful well drilled in the Campos Basin, where more than 85% of Brazil’s crude oil is produced. brazil_oil_platform_petroba

In October, the Ocean Ambassador rig was responsible for finding the Vesuvio prospect. Consultants earlier this week pegged recoverable reserves at Vesuvio to be about 1.4 billion barrels of oil equivalent.

Vesuvio lies in the BM-C-43 block, but at shallower depths. The Ocean Ambassador rig operated in 140 meters of water at Vesuvio but the final well depth was 2,347 meters.

OGX also holds a 100% stake in the BM-C-43 block.

Also in October, OGX said its first-ever well tested positive for hydrocarbons. The 1-MRK-2-SPS well, dubbed Abacate-1, is in the BM-S-29 block.

The BM-S-29 block lies in the promising Santos Basin, off the coast of Rio de Janeiro and Sao Paulo states. Nearby blocks have recently yielded discoveries that have increased positive expectations for OGX’s drilling.

OGX holds a 65% interest in the BM-S-29 block, with partner and block operator Maersk Oil do Brasil Ltda. holding the remaining 35%.

The company’s bright outlook has caused it to review previous plans with an eye toward accelerating its already aggressive drilling campaign.

Earlier this week, OGX CFO Marcelo Torres said that the company will drill 79 wells over the next four years, up from previous plans for 51 wells. In 2010, OGX will drill 27 wells. Some 26 wells will be drilled offshore, with a single onshore well planned for recently acquired concessions in the Parnaiba Basin.

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Brazil Petrobras Reports Alagoas Oil, Gas Discovery To ANP

November 6, 2009

Brazil OilBrazilian state-run energy company Petroleo Brasileiro SA (PBR), or Petrobras, reported an oil and natural gas discovery at an onshore block in the Alagoas Basin late Thursday.

The discovery was made at the inland BT-SEAL-2 block in the Alagoas Basin, according to data on the National Petroleum Agency’s, or ANP, Web site.

Petrobras reported the 5BRSA774AL wildcat well tested positive for traces of oil and natural gas. The well was drilled by the Sonda Convencional 109 rig to a total depth of 2,020 meters.

In recent years, the global economy has been noticeably affected by the pressure on the world’s largest oil producers to keep up with the ever-increasing demand of fuel supply. While countries such as Iran and Mexico struggle to remain exporters, the 2007 discovery of oil in the Santos Basin off the coast of South America, 170-300 miles from Rio de Janeiro, may turn Brazil into the world’s largest oil supplier and lead it to joining OPEC.

The ongoing discovery and production of oil and natural gas in the Santos and Alagoas Basin will bring a plethora of businesses looking to relocate in Rio de Janeiro. Rent in Rio provides luxury and affordable long term leases in and around Rio.

Oil off the Coast of Brazil

October 1, 2009

What it means for the economy

Gigantic oil field discovered in the Santos Basin

In recent years, the global economy has been noticeably affected by the pressure on the world’s largest oil producers to keep up with the ever-increasing demand of fuel supply. While countries such as Iran and Mexico struggle to remain exporters, the 2007 discovery of oil in the Santos Basin off the coast of South America, 170-300 miles from Rio de Janeiro, may turn Brazil into the world’s largest oil supplier and lead it to joining OPEC. The Santos Basin contains what may be two of the world’s three biggest oil finds in the past 30 years: the Tupi and Carioca oil fields. In November of 2007 Petrobras said the offshore Tupi field may contain 8 billion barrels of recoverable crude and in April of 2008 it was announced that Carioca might contain 33 billion barrels of oil (official reports have yet to confirm this claim). In mid-June 2008 BG Group Plc, the U.K.’s third-largest oil and gas company, and Brazil’s state-controlled Petroleo Brasileiro SA made another discovery in Brazil’s Santos Basin called Guara. It is still under debate whether or not Guara is part of the Carioca field, however it certainly proves that the Santos Basin contains vast amounts of untapped crude. In February of 2008 Petroleo Brasileiro SA announced the important discovery of the Jupiter field containing natural gas. According to Strategic Forecasting Inc., these fields could help end the Western Hemisphere’s reliance on Middle East’s crude. Petrobras has a 65 percent operating stake in the Tupi field, Britain’s BG Group PLC holds 25 percent, and Petroleos de Portugal holds the remaining 10 percent. Currently, Brazil’s proven oil reserves are 11.8 billion barrels, less than half of the U.S.’s 21.8 billion. These new finds could potentially surpass the total amount of U.S. reserves. The new oil discoveries have caused the market value of Petrobras to increase to $297 billion, making it the third largest company in Latin America after ExxonMobil and GE and putting it ahead of technology giant Microsoft and the Shell company. Petrobras plans to invest about $33.5 billion in projects this year to increase production and explore the offshore fields. The proposed venture be the world’s largest investment program in the oil and gas industry, followed by OAO Gazprom, which has allocated $30 billion, and Royal Dutch Shell Plc with $27 billion.

A massive endeavor

Although Tupi promises to secure Brazil’s position as a major exporter, Petrobras must first take on the difficult task of turning the oil field into major production field. Analysts forecast that Tupi could cost upwards of $20 billion to develop. The field lies approximately 4.5 miles (7.2 kilometers) below the ocean’s surface. In order to reach it Petrobras will have to go through 7,000 feet (2,100 meters) of water and then drill through up to 17,000 feet of sand, rock, and then a massive salt layer that extends across hundreds of miles. Petrobras is building new refineries (in addition to its already existing nine) in Rio Grande do Norte and Maranhao that are scheduled to begin operations in 2010 and 2014. The company estimates that it will spend $8.6 billion on reducing sulfur at its refineries. The most advanced project Petrobras is scheduled to undertake is the Abreu e Lima refinery which is being built near Recife, the capital of Pernambuco state. Petrobras is also constructing the Rio de Janeiro Petrochemical Complex, or Comperj, at a predicted cost of $8 billion. The company also plans to invest in units that will expand its production of heavy crude oil into diesel.

Looking towards the future

Oil companies are positive that there are more oil fields to be discovered in Brazil’s offshore basin. Repsol YPF SA, Exxon Mobil Corp. and Devon Energy Corp. are among the producers searching Brazil’s waters for reserves. Over the next 2 ½ years drilling companies Petrobras, Chevron Corp., Royal Dutch Shell Plc, and Norsk Hydo ASA will pump oil from Brazil’s eight fields. Analysts predict that efforts will produce a combined 1.02 million barrels a day. Rigs used to drill in the Santos Basin cost $600,000 a day to operate and Petrobras has already signed contracts to purchase or lease 47. Texas companies including Transocean (RIG) and its merger partner Global Santa Fe (GSF), Noble Corp. (NE), Diamond Offshore Drilling (DO), and Pride International (PDE) operate these rigs. The oil boom has created hundreds of new jobs for these companies including design engineers, field service engineers, public and government relations positions, accountants, analysts, consultants, training specialists, project and marketing directors, technicians, hydraulics crew, drilling superintendents, asset development managers, and more. On June 18, 2008 Norwegian company Aker Solutions announced that it has officially opened Brazil’s only manufacturing centre for deepwater marine drilling risers located in Rio das Ostras. With the opening of the new manufacturing base for drilling risers, Aker Solutions has created a further 60 jobs in addition to 130 positions already filled.

Petrobras plans to add 14,000 engineers, geologists, and drillers within the next three years as it develops the giant crude oil discovery. The company plans to expand its workforce 23 percent to about 74,000, surpassing Chevron Corp., the second-largest U.S. oil producer. The hiring surge is part of a $112.7 billion expansion that may allow Brazil to overtake the output of all OPEC members except Saudi Arabia. The company is attempting to hire more than a dozen people a day amid intensifying competition for skilled oil workers after crude prices rose to a record. Exxon Mobil, Royal Dutch Shell Plc, and Saudi Arabia’s state oil company also are accelerating hiring as more oil production moves into Brazil’s deep ocean and harsh environment that requires more advanced technology. California-based Chevron, one of 13 companies exploring the Atlantic seabed off Brazil’s coast, employed 65,000 people at the end of 2007. Exxon Mobil had 80,800. Petrobras intends to recruit all of its new employees from Brazilian universities and technical schools.

The Booming Business and You: Relocation to Brazil

The ongoing discovery and production of oil in the Santos Basin will bring a plethora of businesses looking to relocate in Rio de Janeiro. Rent in Rio provides luxury and affordable long term leases in and around Rio. Many of their apartments are situated near the coast and downtown; convenient locations for those involved in Brazil’s booming oil industry. They have apartments in Sao Paulo for those looking to be near executive offices and headquarters. Also available are leases in Niteroi, a beautiful city located a mere 8 miles from Rio de Janeiro. Rent in Rio aims to make company relocations not simply a business move but also an enjoyable, comfortable, and memorable experience. All of their apartments are equipped with luxury amenities such as air conditioning, high-speed internet, and top quality maid service that is expected of your company’s expenses. Many of Rent in Rio’s luxury apartments come with stunning ocean and city views and we also offer penthouse apartments with gorgeous rooftop pools. The agents at Rent in Rio understand the stress of relocation and therefore take on the task of assisting their customers in every aspect of the transition. Upon arrival, clients are provided with a course on staying safe in Rio de Janeiro. Also available (depending on arrival date) are guided tours of the city. Rent in Rio also offers clients and their families the opportunity to take Portuguese language courses. If you are relocating to Rio to take part in the exciting, fast paced industry of Brazilian oil, allow Rent in Rio to assist you in making your new city feel like home. Call their offices today. 877-289-7543.

By Jennifer L. Bunin