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Petrobras is set to become the world's second largest oil company thanks to a new oil field. But will Brazil be able to overcome the challenges and establish itself among global powers?
In the complex global oil scenario, Brazil may be about to make a historic leap. Imagine a country that, in just a few years, could go from being just another major producer to becoming a true global power.
This scenario, which could seem like the fruit of science fiction or exaggerated optimism, is actually anchored in concrete projections and in a new frontier of exploration: Equatorial Margin.
As the CPG portal has been publishing, located between Amapá and Rio Grande do Norte, this region can completely change the game for Brazil in the global oil market. However, like every great opportunity, this one also comes with enormous challenges and uncertainties.
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Petrobras' current strength and the global context
Today, Petrobras is a multifaceted company, often portrayed in conflicting narratives. On the one hand, it is the a company that often finds itself at the center of political controversies and government interventions.
On the other hand, it is the giant that reports record profits and receives purchase recommendations from large international banks., as happened at the end of June with Morgan Stanley. This duality reflects the complexity and strategic importance of the company for Brazil and for the global market.
In 2023, Brazil positioned itself as the eighth largest oil producer in the world, with a daily production of 3,4 million barrels. But that position could change dramatically in the coming years.
The Brazilian Energy Company (EPE) predicts that, by 2030, Brazilian oil production could reach 5,3 million barrels per day, an increase of 56% compared to 2023. This volume would put Brazil in a fierce dispute with Canada for fourth place in the world ranking.
The Equatorial Margin: the new frontier of Brazilian oil
But what can really take Brazil to an even more prominent position is the exploration of the Equatorial Margin.
According to the Brazilian Infrastructure Center (CBIE), This area has the potential to add 1,1 million barrels per day to national production by 2029.
This would raise the country's total production to 6,4 million barrels per day, consolidating Brazil among the four largest global oil producers.
With estimated reserves of over 30 billion recoverable barrels, the Equatorial Margin could more than double Brazil's current proven reserves, which total around 15 billion barrels.
However, the exploration of this new area faces significant barriers, mainly related to environmental issues.
Petrobras has already drilled around 700 exploratory wells in the region, finding promising reserves. However, the lack of environmental licenses prevents the start of large-scale production.
The risks and challenges on the horizon
While the projections are encouraging, the risks are undeniable. EPE itself predicts that, without exploration of the Equatorial Margin, Brazilian production will peak in 2030, at 5,3 million barrels per day, and will begin to decline in the following years.
Petrobras' rush to begin exploration in this new frontier is justified precisely by this fear. Each year of delay could mean a reduction in future production capacity, compromising Brazil's status as an oil power.
Another significant challenge comes from the political landscape. Government interference in the management of Petrobras is a constant reality.
Although the State-Owned Enterprises Law, passed in 2016, established stricter rules for the management of government-controlled companies, politics still exerts considerable influence over company decisions.
With the federal government holding 50,26% of common shares, Petrobras' management remains vulnerable to changes as the political landscape evolves.
Market and geopolitics: more obstacles in the way
The global oil market is also a source of uncertainty. Despite projections of increased demand until 2029, as predicted by the International Energy Agency (IEA), the sector has already seen moments of extreme volatility.
In 2020, for example, the price of a barrel of Brent, the global benchmark, fell to less than US$20, largely due to the COVID-19 pandemic.. These market shocks could occur again, bringing new challenges for Petrobras and Brazil.
Additionally, geopolitical tensions, especially in the Middle East and Russia, continue to impact global oil production and distribution. These external factors can directly affect Brazil's ability to consolidate itself as a power in the sector.
Petrobras: heading for the top or an uncertain future?
Despite the challenges, Petrobras has shown remarkable resilience. In 2023, the company distributed R$94,35 billion in dividends, and in the first half of 2024, it approved another R$27 billion.
These impressive numbers reflect the company's financial strength, even in an uncertain global scenario. Morgan Stanley reinforced this view by highlighting Petrobras' ability to continue generating cash and distributing dividends, even in adverse conditions.
But the future of Petrobras and the oil market in Brazil still depends on variables that go beyond the company's control. Environmental issues, political interference and global market fluctuations are just some of the forces that will shape the company's destiny in the coming years.
The question remains: will Brazil be able to overcome all these challenges and consolidate Petrobras as the second largest oil company in the world?
“Political interference”… Brazil OWNS Petrobras!… Who is in charge of Brazil?… The President Elected by the People!… So, it is MANAGEMENT of the Company, through the President of Petrobras, who is appointed by the President of the Republic!
* Copying the **** media, which wants to steal Petrobras, to be owned by a few billionaires!!