Brazil set to become major global oil supplier -IEA

LONDON Tue Nov 12, 2013 1:57pm GMT

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LONDON Nov 12 (Reuters) - Brazil is set to become a net oil exporter and top 10 producer from 2015 if it overcomes hurdles to developing its giant offshore discoveries, the West's energy agency said on Tuesday.

In its 2013 World Energy Outlook, the International Energy Agency (IEA), which advises large industrialised nations on energy policy, said Brazil could play a major role in supplying the world's energy needs in coming decades, though its rise would hinge on its ability to develop its resources.

"Brazil plays a central role in meeting the world's oil needs through to 2035, accounting for one-third of the net growth in global supply," the report said.

"Such an increase in supply is heavily dependent on highly complex and capital-intensive deepwater developments, where Brazil is set to consolidate its position as the global leader."

Brazil, Latin America's largest economy, has made several finds in deep water since 2007. Its largest is the Libra field, which holds between 8 and 12 billion barrels of recoverable oil, according to Brazil's oil regulator and a Dallas-based reserve certification firm.

If the projection holds, Libra could nearly double Brazil's oil reserves or give it enough oil to supply the world's crude demand for as much as 19 weeks.

But last month's sale of Libra, designed to launch Brazil as an oil power, highlighted the challenges the sector faces.

It attracted a fraction of the interest expected, with major oil companies worried that development rules offered too little opportunity for profit and too large a role for the government and state-controlled Petrobras.

The auction was won by a group led by Petrobras and including France's Total SA and Anglo-Dutch Royal Dutch Shell Plc along with two Chinese partners - CNOOC Ltd and China National Petroleum Corp.

Though Brazil's energy plan seeks to boost the country's economy, the auction took place as security forces clashed with hundreds of protesters objecting to the sale of natural resources to foreign companies.

The IEA said Brazil's success would hinge on maintaining high levels of energy investment at around $90 million a year, two thirds of which must go to the oil sector.

"The heaviest burden lies with Petrobras, the world's largest deepwater operator, placing an emphasis on its ability to deploy resources effectively across a huge and varied investment programme," it said.

The IEA predicted Brazil would be the world's sixth-largest oil producer by 2035, while the country's net biofuels exports would grow to account for some 40 percent of global biofuels trade over that period.

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