Category: Brazil

Petroleo Brasileiro SA (Petrobras) recently reached an oil production record of 428,000 b/d in company-operated fields in the Santos and Campos basins. The company said the new mark was a result of the increased output that came with the Mar. 17 launch of operations from the P-58 platform in the Parque das Baleias area of northern Campos. The platform has been producing 50,000 b/d through three presalt wells. Petrobras holds 100% of the rights in the area. Twenty-four production wells have been drilled overall, of which 15 are in the Campos and nine in the Santos. Production from Campos and Santos has reached 222,000 b/d and 206,000 b/d, respectively. Fifteen more production wells are expected to start up by yearend, of which 11 will be in the Santos and 4 in the Campos. Of the 15 wells, two are connected to the Cidade de Sao Paulo floating production, storage, […]

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Brazil may see a mass migration of crops and farm workers from huge swaths of currently tillable lands to more temperate zones as global warming takes hold, according to leading climate experts in the country. Longtime Brazilian climate researcher Hilton Silveira Pinto points to the drought that’s cutting grain and coffee output this year as an indicator that rising global temperatures may already be impacting the country’s crops. “This is a taste of what is to come in the future,” said Pinto, a professor at the Center for Meteorological and Climate Research Applied to Agriculture at the University of Campinas. A study co-authored by Pinto that looks at projected warming trends shows Brazil’s soybean production may drop by as much as 24 percent and wheat output as much as 41 percent by 2020 as climate change reduces areas where the crops can grow. Because Brazil is increasingly helping to […]

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Brazilian Vice President Michel Temer said he sees no room for a fuel price increase before elections in October and that inflation surpassing 6.5 percent would be a “disaster.” “I don’t think so. I can’t say with complete certainty,” Temer, 73, said in an interview yesterday at Bloomberg’s headquarters in New York , in response to whether Petroleo Brasileiro SA would raise fuel prices before the election. “I don’t have information about it, but I’m not seeing the possibility.” Petrobras rose 6.6 percent to 16.46 reais yesterday, the biggest jump in more than a week, after a poll showed reduced support for President Dilma Rousseff’s re-election bid. The government controls Petrobras’s board with a majority of voting shares, and investors were encouraged by the possibility of a change in administration, said Paulo Brito, an investment manager at the brokerage firm HPN Invest in Recife, Brazil . The company’s refining […]

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A judicial panel in Brazil ruled a Corp. subsidiary and 10 of its employees will face criminal charges related to offshore oil spills in 2011 and 2012, the company said on Friday. The original criminal charges had been dismissed in February 2013, but an appellate court last October reinstated two counts for environmental damage and failing to immediately notify authorities. Chevron appealed, but a three-judge panel upheld the charges in a 2-1 ruling last week, sending the case back to the federal court that had dismissed the criminal complaint. Chevron has appealed last week’s decision, saying its Brazilian unit "responded appropriately and responsibly to the incident and that there is no damage to the environment or risk to human health." The charges stem from two oil spills, totaling a little more than 2,400 barrels, in the Frade field, about 75 miles off the coast of Brazil. The country’s oil […]

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Norwegian energy company Statoil said Friday it secured formal approval from the Brazilian government to work in the offshore Espirito Santo oil basin. "The new license is another building block for further value creation," Andre Leite, Statoil’s regional manager, said in a statement . "We look forward to working closely together with the operator in the appraisal and further development of the asset." There may be as much as 50 billion barrels of oil offshore Brazil, putting it just behind Venezuela in terms of proven oil reserves in South America. Statoil said the approval extends to the Sao Bernardo discovery in the basin off Brazil’s coast. The company declined to indicate a reserve estimate, but said the area "has an exciting oil potential." Statoil said an appraisal well drilled into the region in 2012 encountered an oil column measuring more than 600 feet thick. The Norwegian said it’s the […]

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A drought in Brazil is crimping water and electricity supplies, creating tensions between the country’s two largest cities and raising the prospect of rationing that stands to hurt President Dilma Rousseff’s re-election hopes. The several-week drought in Brazil’s wealthy southeastern region, home to São Paulo and Rio de Janeiro, is the worst in close to 50 years, and has severely depleted the reservoirs in a country that relies on hydroelectric plants for over two-thirds of its power. Ms. Rousseff won the 2010 election while promising to improve the country’s infrastructure—particularly transportation, housing and energy. But the drought—which experts say is likely to lead to power rationing this year—is now weighing on Ms. Rousseff’s expected run in the October elections. "Dilma will try to sweep this issue under the rug for as long as she can," said Adriano Pires, head of Rio-based energy consultancy CBIE. "The government will try […]

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A drought in Brazil is crimping water and electricity supplies, creating tensions between the country’s two largest cities and raising the prospect of rationing that stands to hurt President Dilma Rousseff’s re-election hopes. The several-week drought in Brazil’s wealthy southeastern region, home to São Paulo and Rio de Janeiro, is the worst in close to 50 years, and has severely depleted the reservoirs in a country that relies on hydroelectric plants for over two-thirds of its power. Ms. Rousseff won the 2010 election while promising to improve the country’s infrastructure—particularly transportation, housing and energy. But the drought—which experts say is likely to lead to power rationing this year—is now weighing on Ms. Rousseff’s expected run in the October elections. "Dilma will try to sweep this issue under the rug for as long as she can," said Adriano Pires, head of Rio-based energy consultancy CBIE. "The government will try […]

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SINGAPORE—Asian natural-gas buyers are being hit in the pocket by a combination of drought and heat in South America, as well as the coming World Cup soccer tournament. Liquefied natural gas available for sale on the spot market, which might normally be shipped to Asia by sea from the Atlantic basin, has for the past two months or so been snapped up by Brazil. The country needs to offset shortfalls in hydroelectricity output caused by dry weather. It also is building up fuel reserves to avoid embarrassing power cuts during the World Cup, which starts on June 12. Argentina has also been buying more. Extremely hot weather earlier in the Southern Hemisphere summer and shortages of domestic gas used to make electricity continue to boost its demand for imports. In a development that illustrates how gas markets are becoming more global, buying by both countries has left less fuel […]

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Brazil should give up electricity for Lent, a Rio de Janeiro-based analyst told Interfax on Wednesday, with a touch of gallows humour. However, it is no laughing matter: the hydropower-dependent country has just recorded the second-driest January in 80 years, and the prospect of electricity rationing looms. The 100 days between Carnival and kick-off for the 2014 World Cup now threaten to be the toughest period of Dilma Rousseff’s presidency. Rousseff, who has staked her political credibility on the lights staying on, is likely to write blank cheques for LNG to bail out the power sector. Analysts blame both the structural weakness of Brazil’s power sector – which affords the country little flexibility during supply tightness – and poor policy decisions for the situation. As reservoir levels run low, costly LNG imports appear to be the country’s last resort for the second consecutive […]

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Brazil’s worst drought in decades is decimating crops but breathing new life into battered commodity markets. It hardly has rained in some of the South American country’s top farming regions since the start of the year, a period when precipitation is usually the heaviest. Traders, analysts and government forecasters who were calling for record harvests in coffee, sugar and soybeans as recently as December are cutting production estimates, triggering a spike in futures prices that may translate into higher costs for consumers later in the year. Futures prices for the arabica coffee variety are up 67% since the start of the year. Raw-sugar prices have risen 8%. Soybeans, which have been affected by drought in some areas and too much rain in others, also are up 8%. The withered coffee trees and parched sugar-cane fields stand in contrast to the bumper crops that have weighed on commodities […]

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