Brazil's president hints at joining Opec

Brazil's president Jair Bolsonaro has hinted at the possibility of bringing his country into Opec, a move that would add significant volume to the supply pool controlled by the producers' group.

Brazil has emerged as a significant non-Opec supplier in recent years, thanks to massive pre-salt offshore deposits discovered over a decade ago. The country's crude output is approaching 3mn b/d, and is projected by the government to reach 5.5mn b/d in 2030.

Bolsonaro told delegates at the Future Investment Initiative Forum in Riyadh today that he would consider Opec membership. "I personally would very much like Brazil to become a member of Opec. Yes, I think the potential is there. We have enough reserves, oil reserves. Actually larger oil reserves than some current Opec member countries."

His remarks come on the eve of two big offshore licensing rounds that are expected to generate brisk competition from Brazilian state-controlled Petrobras and major international oil companies. The main upstream offer, to be held on 6 November, covers up to 15bn bl of oil equivalent (boe) of excess hydrocarbon reserves in the Santos basin pre-salt cluster known as the Transfer of Rights (TOR).

In the past, Brazil's mines and energy ministry has sat in on high-level Opec and non-Opec meetings. But it has said that under Brazilian law and contracts, the federal government — the controlling shareholder of Petrobras — cannot interfere with the production of contracted companies.

Petrobras is Brazil's top oil producer. But growing volumes are now coming from Shell, Norway's Equinor and Sino-Spanish venture Repsol-Sinopec, among others.

Brazilian oil regulator ANP has established a 2.91mn b/d oil production target for 2019, a 12.7pc increase over average production in 2018. Output is expected to increase to 3.29mn b/d in 2020, 3.43mn b/d in 2021, 3.64mn b/d in 2022, and 3.73mn b/d in 2023.

source: Argus Media