Brazil independent oil firms seen investing over US$7bn by 2029

Independent oil and gas firms in Brazil are expected to double production by 2029 from the current 250,000boe/d to 500,000boe/d, and invest 40bn reais (US$7.3bn), sector association ABPIP projects. 

“The growth combines everything: new acquisitions [M&As], discoveries and existing fields, both on land and at sea,” ABPIP’s president Márcio Félix told BNamericas.  

ABPIP's members include Brava Energia (which resulted from the combination of 3R Petroleum and Enauta), Enp, PRIO, Eneva, Petrorecôncavo, Alvopetro, Imetame, Perenco, Seacrest, BW Energy, Energizzi, Geopark, Great Energy, Origem Energia, Petro-Victory, Petrosynergy, Mandacaru Energia, Sonangol and Trident Energy. 

To unlock the projected growth, the association is working with officials to make the open acreage program more flexible regarding environmental licensing and signature bonuses, as well as providing free (pre-stack) seismic data for the industry. 

Other topics on ABPIP’s agenda involve enabling the use of hydraulic fracturing to produce unconventional reserves – which is, practically, prohibited in Brazil – and changing the criteria for qualifying small and medium-sized firms with an eye on royalty charges. 

The association advocates increasing to 10,000b/d and 100,000b/d the production limits for small and medium-sized companies from today’s 1,000b/d and 10,000b/d, respectively, considering that independent groups have expanded output substantially in recent years.  

Royalties for small and medium-sized firms currently stand at 5% and 7.5%, respectively, of the value of the production. For large companies, the rate can vary but is generally close to 10%.