Even with Brazil’s catastrophic coronavirus epidemic — which disrupted nearly all sectors of the economy — the country still managed to produce 2.94 million barrels of oil per day last year, 5.5 percent more than in 2019. Latin America’s biggest market is now the world’s seventh-largest oil producer, overtaking OPEC big hitters Venezuela and the United Arab Emirates.
And there has been further good news for the country’s oil sector, with reports of new deepwater reserves discovered off Brazil’s northern coast.
Meanwhile, state-controlled oil firm Petrobras has implemented a broad divestment plan that is set to make room for other international companies to extract oil from Brazil’s existing pre-salt fields. Since 2016, private firms have been allowed to take part in auctions for the country’s deepwater reserves, but Petrobras retains a right of first refusal and a guaranteed share of 30 percent or more.
Breaking the Brazilian oil major’s de facto monopoly marked a significant change in Brazil’s offshore regulations, representing the most investor-friendly alteration to the law since 1997.
Perhaps surprisingly, the biggest winner from this regulatory...
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