Brazil oil and gas: UK well placed to gain in the market

Oil & Gas has been one of the pillars for Brazilian economic growth over the last decade. The continued discovery and development of reservoirs has been providing opportunities for specialist suppliers around the world – including British companies.

Petrobras, one of the world´s biggest energy companies, still plans to invest $98.4bn between and 2019 – although this is down 25 per cent from its original forecast of $130.3bn. Despite the current corruption scandals involving the state-controlled oil producer and the low global oil prices, geology remains one of the biggest attractions of Brazil’s energy sector.

Specialists estimate that the pre-salt offshore area in Brazil may contain 56 billion barrels of oil. Discoveries in shallow waters have also surprised the market with estimates reaching 3 billion barrels of oil in a single well.

The new big discoveries in this region could make Brazil the 6th largest oil and gas producer in the world in future years.

British companies have been important players in the Brazilian sector and should further expand their participation in the development of the sector for years to come. With the recent BG acquisition, Shell became this year the largest international investor in Brazil and the second largest Oil Company in the country, after Petrobras.

The UK supply chain is also very well positioned in the market, with around 200 UK suppliers already doing business in Brazil.

There are many similarities between Brazil and the United Kingdom in the oil & gas sector, and there are still opportunities and space to expand and increase UK companies’ presence in the country.

The experience of exploration and production for over 50 years in the North Sea led British industry to develop a strong supply chain that can greatly contribute to the investments in Brazil in deep waters, specifically in the pre- salt.

UK companies have the experience, expertise and technology to contribute significantly to the development of the industry in Brazil – in areas such as subsea, offshore construction, field life extension, and complex offshore servicing and maintenance. Decommissioning is another area where the UK has significant experience and that will become increasingly important in Brazil’s older fields.

It is this history and tradition, combined with world-class technological innovation and expertise, which is perfectly suited to the challenges faced by the Brazilian market.

Over the last 3 years, over 800 British executives have participated in events about Brazil organised by UKTI both in Brazil and in the UK. We have led 25 commercial missions since 2012. And the British Diplomatic Mission in Brazil has helped companies from the UK to win over £2bn in the past three 3 years in the Brazilian Oil & Gas sector. As a result, Brazil is currently the 2nd most successful global partner for British companies in the sector.