For experts, high from the sale of crude oil to the foreign market needs to walk along with the expansion of refining capacity in the country
Brazil has never exported as much crude oil as in 2018. 1.12 million barrels per day were sold abroad, which corresponds to a 13.3% increase compared to 2017, according to Secex (Secretariat of Foreign Trade). The number represents about 40% of all production for the year.
Survey of the ANP (National Agency of Oil, Natural Gas and Biofuels), from January to November, also shows net exports (export less import) 13% higher than in 2017.
Despite sending crude oil out, the country needs to buy a small amount because of the technical specificities for refining – currently around 10% of the volume of exports.
The price of a barrel on the rise caused the revenue generated by oil exports to jump 51.2% from US $ 16.6 billion (2017) to US $ 25.1 billion (2018). If discounted import expenses, net revenue was US $ 20.1 billion, according to Secex data.
The main buyers of Brazilian oil in 2018 were China (56.5%), the United States (11.9%) and Chile (8.43%).
Energy Research Company (EPE), linked to the Ministry of Mines and Energy, estimates that oil production in the pre-salt will double over the next eight years and that the country will become one of the five largest exporters in the world among the top ten.
“Our forecast, based on the rhythm of the projects that have been mapped, is a tendency for us to triple our exports by 2027. It will reach 3.1 million barrels a day,” says Marcos Petroleum Superintendent Marcos Frederico Farias de Souza.
Preparing for the future
Magda Chambriard, former director of the ANP and consultant of FGV Energy, thinks that Brazil will need to prepare for the future with the expansion of port terminals, pipelines, storage facilities and all the rest of the infrastructure around the oil business and derivatives.
“The export of crude oil is between Rio de Janeiro, São Paulo, and Espírito Santo, and more is required of the port infrastructure, which has an important logistical limitation, which has to be improved because if production is to increase further, there is no refining [in Brazil] and increase the consumption of derivatives and importshttps://brazilmonitor.com/files/index-php/2019/01/22/, we are in a delicate situation. ”
Petrobras, the main agent of the market, reduced about 15% of exports in the first nine months of 2018 compared to the same period of 2017.
The company focused on domestic refining due to higher demand for fuel. On the other hand, the consultant of FGV Energia says that foreign companies have increased production and export.
“These large oil companies, when faced with a real possibility of the pre-salt, are beginning to move. They have generally paid high bonuses [to have the right to exploitation], they have to pay back quickly.”
The last five pre-salt-sharing auctions, held in 2017 and 2018, had less participation from Petrobras and a greater presence of foreign companies from countries such as the US, Qatar, China, the Netherlands, and Portugal. However, they are only expected to start producing oil in about eight years, experts say.
Large oil companies such as ExxonMobil (USA), Shell (Netherlands and UK), BP (UK), Equinor (Norway) and Petrobras submitted to Ibama 61 licensing processes for oil and natural gas drilling in the second half of 2018. The number indicates a surge in exploration license applications after seven declining years.
Contrary to export growth, Brazil has increased imports of petroleum products (gasoline, diesel, aviation kerosene, LPG and lubricants) in the last two years.
Despite registering fewer imports https://brazilmonitor.com/files/index-php/2019/01/22/of gasoline and diesel in 2018, compared to 2017, lpg (used in gas cylinders) increased by 24.5%; of aviation kerosene, 32.8%; and lubricants, 35%.
Magda Chambriard estimated that with each barrel of crude oil exported in 2017, US $ 12 (about R $ 45) more per barrel of the imported derivative was spent.
“You’re exporting less value-added products and importihttps://brazilmonitor.com/files/index-php/2019/01/22/ng a higher-value-added product, and still spending on transportation. that reflects a final cost to the consumer … That difference from refining to importihttps://brazilmonitor.com/files/index-php/2019/01/22/ng was $ 1, 75 billion [about r $ 6.56 billion]. ”
An EPE study warns that Brazil will reach the historic level of 213,000 barrels per day of diesel oil imported in 2027: 6% more than the largest volume recorded so far (in 2017), which, according to the company, signals “possible need for investments in new supply infrastructure”.
The EPE superintendent adds that the increase in oil exports does not invalidate the fact that Brazil also has to invest in expanding refining capacity, now around 2.4 million barrels per day.
“It needs investment in refining to be able to maintain a stable price policy,” he says, noting that there are prospects for the Comperj (Rio de Janeiro Petrochemical Complex) and small refineries.
Coperj currently has 80% of the works completed, but the rest was paralyzed in 2015, with the progress of Car Wash. Petrobras is already on track to resume work this year after a partnership with China’s CNODC.
Magda Chambriard considers how extremely important that the country has investments in the domestic consumer fuel market.
“We have an international market for crude oil, let’s say, stressed out. OPEC and Russia want to reduce supply, the United States wants to increase, but we are putting more products in this stressed market. At the same time, by opening up our consumer market, when, when exporting, it starts to import derivatives. So the question I always ask is: to what extent? ”
For the expert, “it is not reasonable for a country to give up the derivatives market, which is the fourth largest in the world in terms of motor vehicle fuels.”
Even though Brazil has investments in refineries, an EPE study shows that “the country is expected to continue as a net importer https://brazilmonitor.com/files/index-php/2019/01/22/throughout the study horizon (up to 2027), with emphasis on large volumes of imported naphtha, aviation kerosene (qav) and diesel oil “.
