Brazil

While the dumpster fire that is Venezuela continues to burn, Brazil is poised to be the oil superpower of South America. However like a lot of the world they are handicapped by the current oil devaluation.

Brazil currently produces about three million barrels per day, mostly from the Campos basin. A shallow water offshore collection of fields located around Rio De Janeiro. These fields are maturing, but still hold an estimated eight billion barrels. This puts Brazil as an important oil producing country, but not a vital one. Where Brazil can vault into a global player is the pre salt layer. A huge amount of oil covered by a layer of salt. It is a massive offshore field that has produced from every exploratory well that has been drilled into it. People are salivating at the thought of bringing it online. Preliminary reports are that it has eight billion barrels of recoverable oil, but as its is fully explored that number will surely rise. Top end estimates are in the 35-50 billion barrel range (70-100 NFL units worth of oil).

There is just one teeny problem. This oil is not exactly easy to get at. The field is about 250km offshore. In 2000m deep water. The salt layer is under 2000m of rock. And the salt layer is about 2000m thick. So the oil is only 6km below the surface, in the depths of the ocean. Not the easiest thing to get to. And that’s the rub. Brazil needs that oil to help fix their economy. But they don’t have the capital to develop the field. So they are doing the next best thing. Auctioning off parcels of the field to foreign companies. The first of which was just sold for 2.5 billion to Norway. Once oil rebounds to above $100 USD, there will be drilling all over that salt patch, and sweet crude will flow free. Until that point it will just sit out there undeveloped. Mocking Brazil, as the countries’ Olympic debts mount.