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Brazilian Oil Industry to Underpin Real Estate Growth

Todays Date: January 16, 2019

Rapid growth is projected in the Brazilian oil industry leading to a major trickle-down effect across the nation. As the wealth generated by the industry spreads throughout the economy it is expected to give the already-booming Brazilian real estate industry a huge boost.

The Brazilian Finance Minister is confident that Brazil will become an oil super power in the next ten years as projections show that the country will have crude for half a century and will become a top ten oil exporter and an important player in international geopolitics.

Finance Minister Edison stated that production of 3.6 million barrels a day is possible by 2017, with domestic demand anticipated at 2.6 million barrels a day, leaving a possible export of 1 million (barrels a day)”. President Lula da Silva also maintains that the country plans to invest heavily in the petrochemical sector so it can sell oil derivatives and not just unrefined crude.

The Government owned company, Petrobas, is responsible for the management and exploration of oil and gas in the country. The company has been recently ranked eighth in the world by market value by the leading accountants, Ernst & Young.

As little as a year ago, Petrobras market value was 95.9 billion US dollars, a respectable 37th place. Oil finds and advances in technology have seen the market value surge to 164.8 billion US dollars to the eighth place in the ranking of the worlds biggest corporations.

This September saw Petrobras announcing the discovery of another deposit of oil and natural gas in Brazil’s Santos Basin. This find was in conjunction with British Gas Group and the Spanish company, Repsol. The find was made after a fourth well was drilled in the BM-S-9 block off the country’s south-eastern coast.

A find the previous week in the same region is estimated to hold between 1.2 billion to 2 billion barrels of oil and gas, although no projections are available with regard to the new find.

Sergio Gabrielli, Petrobas CEO said Petrobas will now concentrate its investment strategy, purely in its domestic market, as its primary role is to develop and extract the recently found offshore oil deposits.

President Lula da Silvas government is proposing assigning the dominant role in Brazils petroleum industry to Petrobras in a move to increase control over the energy sector. This is currently being debated in Congress.

The Government will give Petrobas operator status for all the oil and gas finds and will serve as the commercial outlet for sales of all oil derivatives, both domestic and international. There are also plans to create another state-owned company called, Petrosal, to manage the Governments oil and gas assets. Analysts predict that this company could eventually grow larger than Petrobas.

Speaking this week, Petrobras CEO, Jose Sergio Gabrielli announced We are in a fantastic moment. Brazil is cementing its future as a leading oil superpower and the positive effects will be felt throughout the Brazilian economy.

This article was written by Ginny Naish the Marketing Director of Property Dreams Brazil, a real estate consultancy based in Joao Pessoa, Paraiba. Property Dreams Brazil can provide consultancy services with regard to property investment, land, re-location and real estate marketing. Please visit Property Dreams Brazil for further information on investing in Brazil.

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