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Fourteen years ago, Petrobras lost its upstream monopoly due to constitutional changes. Even though there are around 70 private companies, mostly foreign, operating in Brazil, Petrobras still maintains nearly absolute dominance over the sector.
Petrobras produces around 90% of national oil output and is in the pole position for the most important oil discoveries in the last few years.
Since 1999, the National Agency of Petroleum, Natural Gas and Biofuels (ANP) received 1,201 notifications of discoveries in Brazil but only 152 were declared commercial. Of these 152 discoveries, 92 took place in fields operated by Petrobras. Forty-nine of these discoveries were offshore. Out of the offshore finds, Petrobras was responsible for 39.
Foreign companies are responsible for 10% of petroleum output in the country out of around 2.5 million barrels per day (b/d). Petrobras plans the largest amount of investments for the next few years, $215 billion up to 2015, which is equivalent to 83% of total investments in oil and gas.
The postponement of new licensing rounds for exploration since 2008, the 11th round, increases Petrobras' firepower in the presalt. The discovery of giant presalt fields was first announced in 2007.
"Monopoly is returning at full speed," Wagner Freire, a former Petrobras E&P director told the local press.
Practically all private companies are members of the Brazilian Petroleum Institute (IBP). According to the IBP, between 1998 (year of deregulation) and 2011 member companies invested $30 billion, which is 11.5% of the $262 billion that Petrobras invested in the same period.
The situation of IBP members vary. Some companies ending their exploratory program without any discovery will have to return their concessions to ANP.
Others have a bright future in Brazil as partners of Petrobras in the presalt. Examples are BG, Spain’s Repsol YPF, and Portugal’s Galp, the last two associated with China’s Sinopec.
Sources at BG Brasil said that in 2020, the company’s output in Brazil will be equivalent to the group’s one-third global production and $30 billion will be invested until 2020.
The Anglo-Dutch company Shell, invested over $ 3 billion and plans to invest more.
Norway’s Statoil has the Peregrino field in the Campos Basin, which is its largest international project with a 40,000 boe/d production, and is planning on ramping up to 100,000 boe/d. The company estimates the total recoverable reserves in the oil field is approximately 600 million boe, recoverable over 30 years of production.
Recent Chinese investment in Brazilian oil and gas reached $10 billion, including $7.1 billion from China Petrochemical Corp. (Sinopec).
There is a lot of speculation about why the next licensing round is being postponed. The best bet is that the delay benefits state-controlled Petrobras. Legislation and regulations are heavily open to interpretation, point out analysts, and decisions are heavily presidential, that is Pres. Dilma Rousseff has the last word about another licensing round.