São Paulo – Earnings from pre-salt layer oil reserves, which are being discovered at great depths off the Brazilian coast, may reach US$ 10 trillion in 35 to 50 years. The estimate was made by engineer Paulo Metri, technical director of organization Clube de Engenharia, based in Rio de Janeiro, advisor to the Brazilian Federation of Engineering Associations, and a specialist on the matter.
The figure concerns only revenues from sales of the commodity, but Metri believes that several activities directly or indirectly linked to the oil industry will be impacted, ranging from mining to technological research, steel production, equipment manufacturing, ship building, and even consumer goods.
“The initial impact should be felt by [oil industry] suppliers,” he said. “Ultimately, however, it should even reflect on so-called ‘white line’ appliances, for instance, because the employees at a shipyard, being employed and better paid, will spend more on refrigerators, stoves, etc.,” he added.
In order to calculate pre-salt revenues, Metri assumed that reserves should total 90 billion barrels. Petrobras currently forecasts recoverable oil volumes ranging from 10.6 billion to 16 billion barrels, which in itself would suffice to double the country’s reserves. The engineer claimed, however, that it will still take time before the total size of the reserves is accurately known, and that oil industry technicians are making unofficial estimates similar to the ones he used.
Metri also considered that the average oil barrel price should be US$ 150 during the period, and investment and expenditures should total US$ 1 trillion. “Oil dependence should remain high and rising,” he stated. “Demand is certain, therefore [companies] may invest across the entire production chain,” he declared.
Based on data from international publications, he believes that the oil demand worldwide should rise from the current 84 million barrels per day to 106 million in 2030, and that the output during the period should drop to 31 million barrels, generating a 75 million barrel deficit – considering only reserves currently in existence and not counting new findings, the Brazilian pre-salt included.
The key pieces of information, in his opinion, are that demand will continue to grow despite the search for alternative sources of energy, and that the global production will tend to drop. In Brazil, production is currently around 2.3 million barrels of oil and gas equivalent, and with the pre-salt layer it may reach 5.1 million by 2020.
Out of the pre-salt areas, according to him, 28% have been negotiated under the regular concession regime in effect in the country, but new oil fields should only be tendered once the National Congress has passed specific acts on the matter now being elaborated by the government. These acts should raise the State’s and Petrobras’ stakes in business.
Metri believes that although the new acts have a “complicated” model, they will be a step forward in the sense that Petrobras will own a mandatory stake in all consortia; the government will be paid in oil and revenues from sales will go to a social fund, which will increase the share of earnings that will remain in the country; and Petrobras will be the sole operator, which guarantees a greater number of purchases made in Brazil itself.
“In 13 years of the concession regime, no foreign company has ever purchased a rig in the country, the only enterprise that has ever purchased them was Petrobras,” he said. “The new model will ensure many purchases in Brazil and the development of new technologies,” he added.
In spite of the higher stakes and state-owned control, the engineer believes foreign companies will be interested, because they will continue to profit from sales of their production. “The profitability, which was very high, will now be just high,” he said.
*Translated by Gabriel Pomerancblum
