Real Estate Growth a Certainty with Huge Brazilian Oil Finds

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.

Finance Minister Edison has stated in the next ten years Brazil will become an oil superpower and based on current projections will have crude oil for export for the next 50 years. This will result in Brazil becoming an important player in international politics.

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.

Much of Brazil’s oil and gas production is managed by the Brazilian Government-owned company, Petrobas . A recent Ernst & Young survey rated the company the worlds eighth biggest global company in market value.

With the recent huge finds and massive leaps forward in technology accomplished by Petrobas, its market value has risen from $95.9 billion just over a year ago to $164.8 billion.

The discovery of another huge oil find this September in Brazils Santos Basin, Petrobas in conjunction with the United Kingdoms BG Group and Spain’s Repsol was the result of 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.

Petrobras will now concentrate its investment strategy on the domestic market, said Petrobras CEO Jose Sergio Gabrielli, who went on to explain that the primary objective now was not to continue investing overseas, but to ensure the effective development of all the recently-discovered offshore oil reserves.

President Lula da Silva’s plan to increase control over the energy industry through regulation is currently being debated by the Brazilian congress. The Governments proposal is that Petrobas will have the dominant role in all matters with regard to the petroleum industry in Brazil.

The company will be given operator status for all the finds and will also serve as the commercial outlet for the government’s oil take, refining the crude oil at several planned refineries for sale both here and abroad. A new state-owned company, Petrosal will be created to manage the government’s precious assets. Petrosal could eventually overshadow Petrobras, according to some analysts.

Petrobras chief executive, Jose Sergio Gabrielli said this further boosts Brazils chances of becoming a leading producer of oil and We are in a fantastic moment.

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 real estate investment, land, re-location and real estate marketing. Please visit Property Dreams Brazil for more information on investing in Brazil.