Oil boom could help Rio’s economy emerge from the recession

petrobras oil boom rio de janeiro

Oil boom could help Rio’s depleted finances. Photo: Stéferson Faria/AgP

For years now, Rio de Janeiro has been the textbook example of the financial crises facing Brazilian states. Just weeks before the Rio Olympic Games in 2016, the state declared “public calamity” – just one step away from bankruptcy. Rio’s financial collapse has led to not only public safety crises, but also protests from public servants over months of undelivered paychecks.

Yet according to a study conducted by the consulting company Tendências Consultoria Integrada, Rio’s GDP is expected to grow by 6.1 percent in 2019 – and it’s all thanks to an oil boom. If that forecast is confirmed, it will mark the first time since 2015 that the state of Rio de Janeiro has grown more than the national average.

The oil activity is expected to generate nearly 9 billion BRL in revenue for the state’s administration. Seven oil exploitation projects are planned for 2018 – twice as many as in 2016, which was a rough year for the sector. Over the next three years, 18 oil platforms will be inaugurated. Of those, 14 will be dedicated to deep-water reserves, known in Brazil as “pre-salt.”

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