Page 12: of Offshore Engineer Magazine (Sep/Oct 2019)

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REGIONAL REPORT Brazil

Brazil’s New Dawn

Brazil’s of shore oil and gas sector: it’s complicated, challenging and rife with opportunity.

BY ERIC HAUN razil today is seeing offshore gotten the corruption scandal under con- activity increase, production is trol, activity in Brazil should be brisk on the rise, and its government over the next decade or two,” said Jim

Bhas made signi? cant strides to McCaul, head of International Maritime remove obstacles for investment. But Associates and World Energy Reports. not long ago the picture looked very dif- “The country is also opening up to for- ferent for one of the planet’s foremost eign investment. This will help draw offshore oil and gas regions. more international players and augment

Brazil, just like the rest of the world, Petrobras’ project start capabilities.” was hit hard by the oil price downturn, Lysdahl, too, said he sees promise. but the slump’s effects were ampli? ed in “Brazil is one of the regions with the the South American country by the so- best potential for an activity boom go- called Operation Car Wash corruption ing forward,” he said, but noted, “This scandal which saw executives from Bra- boom has not started yet, we need to see zil’s state oil ? rm allegedly take bribes more ? eld sanctioning ? rst, which is an in return for awarding in? ated contracts. early indicator of activity.”

On the back of the industry downturn Local regulatory changes have played and scandal, spending and activity off- an important role. In a rethink of the shore Brazil were reduced more than nation’s offshore strategy, the Brazil- other regions, said Lars Lysdahl, a prin- ian government in 2016 instituted the cipal analyst at Rystad Energy. “An Pedefor (Program for Stimulating the example is the demand for ? oater rigs, Competitiveness of the Supply Chain, which has declined by almost 80% since the Development and the Improvement the 2013 peak, while other comparable of Suppliers of the Oil and Natural Gas regions like US Gulf of Mexico and Sector) to relax local content rules and

West Africa are down by 30-50% in the incorporate new ? nancial incentives for same time period,” he said. foreign companies.

But these days, following impact- “On recent license rounds Petrobras been competitive and attracted global ful policy shifts, and with a number of is not mandated to be the operator, al- majors, with foreigners such as BP, large high-impact ? elds slated to come though they still have the ? rst right of Equinor, ExxonMobil and Shell all on stream and ready for development, refusal. This opens up for other explo- now operators and expected to compete things are looking up long term for the ration and production companies, spur- again in upcoming rounds, including country and its largest exploration and ring their interest as they can in? uence the licensing bonanza soon to com- production company, Brazilian state-run ? eld development and build local com- mence in the ? nal quarter of this year.

oil ? rm Petroleo Brasileiro SA, or Petro- petence and organization as operators,” On October 10, Concession Round 16 bras, as the ? rm is commonly known. Lysdahl said. will offer 36 blocks in ? ve basins, in- “Now that Petrobras has pretty much Brazil’s recent pre-salt rounds have cluding three that are frontier. On No- 12 OFFSHORE ENGINEER OEDIGITAL.COM