PrintBrazil is the 10th largest energy consumer in the world and the third largest in the Western Hemisphere, behind the United States and Canada. Total primary energy consumption in Brazil has increased significantly in recent years. In addition, Brazil has made great strides in increasing its total energy production, particularly oil, over the past decade. Increasing domestic oil production has been a long-term goal of the Brazilian government.
The largest share of Brazil’s total energy consumption comes from oil (48 percent, including ethanol), followed by hydroelectricity (35 percent) and natural gas (7 percent). The large share of hydroelectricity in Brazil’s energy mix represents the dependence of electricity generation on hydroelectric dams. Natural gas is currently a small share of total energy consumption, but attempts to diversify electricity generation from hydropower to gas-fired power plants should cause natural gas consumption to grow in coming years.
Oil
Brazil has the second-largest crude oil reserves in South America, and is one of the fastest growing oil producers in the world.
According to Oil and Gas Journal (OGJ), Brazil had 11.7 billion barrels of proven oil reserves in 2007, second-largest in South America after Venezuela.
The offshore Campos and Santos Basins, located on the country’s southeast coast, contain the vast majority of Brazil’s proven reserves. In 2006, Brazil produced 2.2 million barrels per day (bbl/d) of oil, of which 77 percent was crude oil. Brazil’s oil production has risen steadily in recent years, with the country’s oil production in 2006 about 6 percent (or 130,000 bbl/d) higher than 2005. EIA estimates that Brazil’s oil consumption in 2006 averaged 2.3 million bbl/d.
Based on its August 2007 Short Term Energy Outlook, EIA forecasts Brazilian oil production to reach 2.32 million bbl/d in 2007 and 2.64 million bbl/d in 2008. As a result of this rising oil production, EIA estimates that Brazil will become a net oil exporter by the end of 2007.
Sector Organization
State-controlled Petrobras is the dominant player in Brazil’s oil sector, holding majority positions in up-, mid-, and downstream activities. The company held a monopoly on oil-related activities in the country until 1997, when the government opened the sector to competition and freed oil prices from state control. The principal government agency charged with monitoring the oil sector is the National Petroleum Agency (ANP), which is responsible for issuing exploration and production licenses and ensuring compliance with relevant regulations.
Despite the opening of the sector to private actors in the late 1990s, foreign-operated oil projects are rare in Brazil. Royal Dutch Shell was the first foreign operator of crude oil production in the country, operating a single, relatively small field in the Campos Basin. In mid-2007, Devon brought its Polvo field on-stream, representing the first oil project without any Petrobras participation.
Exploration and Production
Petrobras controls over 95 percent of the crude oil production in Brazil. The largest oil-production region of the country is Rio de Janeiro state, which contains about 80 percent of Brazil’s total production. Most of Brazil’s crude oil production is offshore in very deep water and consists of mostly-heavy grades. One of Brazil’s marketed crude streams is Marlim, which has an API of 19.6º and a sulfur content of 0.67 percent.
Petrobras has expanded production in recent years. In early 2006, it brought the Albacore Leste field online, which will eventually produce 180,000 bbl/d. Other 2006 production additions included expansion of the Golfinho (100,000 bbl/d increase) and Jubarte (60,000 bbl/d increase) fields. In the first half of 2007, Petrobras brought new production online at the Piranema field (20,000 bbl/d) and Espad
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