Oil revenue triples in Brazil and reaches 3% of GDP – 04/18/2023 – Market

Brazil has practically tripled revenues from the oil sector in recent years and is preparing to increase production by between 70% and 80% by the end of the decade, which will bring more dollars to the country, via exports, and the possibility of greater fiscal balance.

The country currently produces around 3 million barrels of oil per day, 1 million of which is exported. By 2025, national production should jump to 5.2 million barrels/day, and most of the surplus will be sold to the foreign market, mainly in Asia.

The forecasts were presented on Tuesday (18) at the online seminar “The energy transition and the impacts on the economy”, promoted by Sheet and FGV Ibre (Brazilian Institute of Economics of the Getulio Vargas Foundation).

According to the participants, the energy transition underway in Brazil and in the world, plus advances in oil exploration internally, open up a horizon of business opportunities and use of resources for the Brazilian macroeconomic stabilization.

According to Bráulio Borges, associate researcher at FGV Ibre, by 2020 revenues from the oil sector in Brazil represented around 0.9% of GDP (Gross Domestic Product). In 2022, they increased to 1.8%; and should reach 3% of GDP by the end of this year.

“For many years, Brazil was a net importer of oil and derivatives. This changed from 2016, and now we will have a large surplus”, says Borges.

According to Fernanda Delgado, corporate executive director of the Brazilian Institute of Petroleum and Gas, a good part of the Brazilian oil not consumed internally will be exported to Asian countries, where the product is widely accepted because it has low sulfur doses.

For Silvia Matos, coordinator of the Macro FGV Ibre Bulletin, the sector’s revenue could help Brazil to improve the stability of public accounts and, as a consequence, the environment for investments in the area.

According to Delgado, direct investments planned for the next ten years add up to around US$ 185 billion in the oil and gas sectors.

Watch the entirety of the online seminar on the subject: