doesn’t mean they know how to produce it like we can in the GoM…
By MarEx September 20, 2013
Just a couple of years ago, the Brazilian economy was soaring at 7.5% a year. Petrobras was strategically positioned at the top of global oil production and Eike Batista was destined to become the richest man in the world. But, what happened?
Today, the Brazilian economy is growing at 1% as of last year. Petrobras is mounted with huge debt and lots of non-producing projects. Batista, with a fortune once estimated to be around $35 billion has fallen on hard times; he is estimated to have to only $4.8 billion left.
Many say it’s the government that has strapped Petrobras with too many mandates like building offshore vessels and tankers, oil platforms in Brazil. It also wants more than 50% of oil field workers and mariners to be Brazilian.
In an effort to keep unemployment low, the government began dictating to Petrobras how it must operate and whom it had to put to work. And as its ability to produce oil fell, Petrobras and the government began importing foreign gas to keep up with demand — but they had to sell it at a loss.
Meanwhile, the United States began ramping up its production of shale oil and gas led by LNG. While the U.S. redraws the global petroleum map, Brazil has shale but it is focused on offshore production and falling sorely behind and deeper in debt.
Recently, Exxon, BP and BG Group passed on bidding on Brazil’s upcoming October 21st auction of its Libra field, which is estimated to be Brazil’s biggest oil find yet. In fact, rig operators have also become disenchanted with Brazil’s oil production as Transocean and Diamond Offshore began retreating. Transocean began stacking rigs and Diamond cannot get paid by Batista’s OGX Petroleo e Gas SA.
Americans still remain the world leaders in offshore. We pioneered the shallow water and exploring and producing from the depths. WE ARE NUMBER ONE!