The Brazilian government is breathing new life into the nation's energy industry.
Petroleo Brasileiro SA recently announced it would invest $20 billion over 4 years in a drive to make the country self-sufficient in oil production by 2003.
That would require boosting production from the current 1.13 million b/d to 1.75 million b/d.
Petrobras would invest up to $4 billion this year and $6 billion in 2000. Funding shortages forced Petrobras to cut its 2000 production target from 1.5 million b/d to 1.3 million.
Meanwhile, the government plans to trim its 84% ownership of Petrobras to 51% by the end of the year, if stock market conditions improve.
And the government is on track to fully deregulate domestic fuel prices by August 2000, although Petrobras will retain its monopoly in the refining and transportation sector.
For its part, Petrobras plans to disclose its new strategic plan within a few weeks. It will establish benchmarks for financial and operating performance.
Petrobras Pres. Henri Reichstul-who took office earlier this year-said that, among other things, Petrobras would raise salaries to a level competitive with other Brazilian businesses and seek to hire 1,000 younger persons in an effort to "oxygenate" the firm.
Next round
Last month, the government signed oil concessions with Petrobras and 10 foreign firms, the result of Brazil's first licensing round last June.
It marked the first time Brazil has allowed foreign firms access to its oil and gas resources since Petrobras was established as the state oil monopoly in 1953.
Although the National Petroleum Agency (ANP) sold only 12 of the 27 blocks offered, it claimed to be pleased with the $180 million sale (OGJ, June 28, 1999, p. 31).
ANP plans another licensing round in the second quarter of 2000. That one will offer 23 blocks, 13 in various depths offshore and 10 onshore.
Although the initial round did not entice bids from any Brazilian firms (other than Petrobras), ANP thinks the onshore blocks will draw bids from smaller domestic companies in the next sale.
ANP Director David Zylbersztajn said blocks offered in the sale would average 2,500 sq km, about half the size of those in the first round.
The next sale will offer some enticing blocks, including four offshore in the established Campos basin and five in the Santos basin.
ANP plans to make presentations regarding the next bidding round this fall in Houston, Tokyo, Calgary, and London.
Santos find
Petrobras's recent Santos basin discovery surely will increase industry interest in new concessions there.
Petrobras said the discovery, 102 miles off Rio de Janeiro, holds an estimated 600-700 million bbl (OGJ, Sept. 27, 1999, p. 28).
The discovery was the largest Petrobras has made since it started up Roncador field in the Campos basin 3 years ago.
Brazilian President Fernando Cardoso says the discovery justifies the nation's oil liberalization program and shows that Petrobras will be able to compete in the new deregulated environment.
