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Non-Tech : The Brazil Board -- Ignore unavailable to you. Want to Upgrade?

To: kidl who wrote (2120)11/3/2020 3:34:11 AM
From: elmatador  Respond to of 2172
The New York Times?

To: kidl who wrote (2120)11/5/2020 10:51:49 AM
From: elmatador  Respond to of 2172
Hat tip THE ANT

To: kidl who wrote (2120)11/7/2020 2:51:59 AM
From: elmatador  Respond to of 2172
US elections over, the BRL is back to its August level.

To: kidl who wrote (2120)11/27/2020 5:33:34 AM
From: elmatador  Respond to of 2172
Brazil Is Emerging As The World’s Leading Offshore Oil Producer

By Editorial Dept - Nov 15, 2020, 12:00 PM CST

Sharply weaker oil prices, the COVID-19 pandemic, and heightened geopolitical uncertainty have done little to blunt Brazil’s epic offshore oil boom. By September 2020 Brazil had soared to be the third-largest supplier of crude oil to China, the world’s second-largest economy. The scale of Brazil’s deep-water offshore oil boom is underscored by the pre-salt Tupi oilfield which for the third quarter of 2020 reached the impressive milestone of having pumped two billion barrels of accumulated oil production in the decade since commercial oil production began. A key reason for this is the rapidly growing popularity of the sweet medium crude oil grades produced from Brazil’s pre-salt oil fields, notably Tupi the world’s largest deep-water oilfield, and the Buzios field.

Petrobras, which is spearheading the development of Brazil’s vast offshore pre-salt oil fields reported record crude oil exports for September 2020 of which around 87% were bound for China.

There are signs that Brazil’s offshore oil boom will continue unimpeded despite China’s oil imports slowing.

Petrobras Chief Executive Roberto Castello Branco believes China has the capacity to absorb all the crude oil produced for export by Brazil, even with that output growing at a steady clip.

The growing popularity of Brazil’s sweet medium grade Lula and Buzios crude oils pumped from the Tupi and Buzios fields sees them selling at a premium to Brent in China. Soaring demand for those crude oil blends is causing their price differentials to widen further, sparking speculation that they could become the world’s most expensive crude oil varieties.

Petrobras is actively seeking new export markets in Asia where the demand for light sweet grades of crude oil is growing because of the push for higher quality low sulfur content gasoline, diesel, and maritime fuels. India has become a key target market.

The world’s fifth-largest economy, prior to the COVID-19 pandemic, was expanding at a solid clip boasting GDP growth of up to 8% in recent years, making it the fastest-growing major economy globally. While the IMF predicts that India’s economy will contract by over 10% during 2020 it is expected to return to growth in 2021 with the IMF anticipating an impressive 8.8% annual year over year GDP growth rate. India’s solid economic growth coupled with a large, growing, and increasingly wealthy population will cause the demand for energy and fuels to rise significantly. U.S. sanctions that prevent Indian refiners from purchasing Venezuelan crude oil have forced them to look elsewhere, while the introduction of IMO2020 this year has substantially boosted demand for sweet crude oil in Asia.

The new maritime regulations also triggered a lift in demand for Brazil’s medium sweet crude oils from Singapore, which is a regional shipping hub.

This rising demand for Brazil’s pre-salt sweet medium crude oil grades will be met by growing supply. Despite the COVID-19 pandemic and sharply weaker oil prices after the March 2020 price crash, Brazil’s pre-salt production is expanding. Data from Brazil’s national petroleum regulator, the National Agency for Petroleum, Natural Gas and Biofuels (ANP - Portuguese initials), shows September 2020 (in Portuguese) pre-salt oil production of almost 2.6 million barrels daily, which was 13% greater than a year earlier.

That saw pre-salt oil output responsible for 89% of Brazil’s total petroleum output for the period compared to 78% for the equivalent month in 2019.

The volume of sweet medium crude oil pumped from Brazil’s pre-salt oil fields will keep expanding. Petrobras, which is responsible for over 60% of Brazil’s pre-salt oil production, is investing in ramping-up activity at its pre-salt assets, notably the Buzios oilfield. Brazil’s national oil company recently announced the $353 million purchase of the stakes of Shell and Petrogal Brasil, a subsidiary of Portugal’s Galp Energia, in the floating production storage and offloading vessel P-71.

The FPSO was to be deployed in the Tupi field but Petrobras has chosen to place the vessel, which has 150,000 barrels daily of production capacity, at the Itapu oil discovery. Brazil’s national oil company expects to bring Itapu online during 2021, significantly earlier than the planned 2024 start date. For that reason, Petrobras, the owner of 65% of the Tupi oilfield, has engaged partners Shell, which has a 25% stake, and Petrogal, the owner of the remaining 10%, to design a new development plan for Tupi which will be delivered to the ANH in 2021. Tupi’s considerable potential is underscored by Galp’s belief that the deep-water oilfield has up to 20 billion barrels of oil in place.

Production from the Buzios pre-salt field is growing at a rapid clip reaching an average of 604,000 barrels daily for the third quarter of 2020, or just over a third of Petrobras’ total pre-salt oil output for the period. For September 2020 alone, Buzios produced an average of 749,810 barrels of oil daily which while 1% lower than August 2020 was an impressive 84% greater than the same period during 2019.

The sweet medium crude oil, which has an API gravity of 28.4 degrees, a low sulfur content of 0.31%, and low aromatics, is rapidly growing in popularity among Asian refiners. In response to this rising demand, mainly from China, Petrobras is ramping up activity in the field. Brazil’s national oil company plans to have 12 FPSOs installed in the Buzios field by 2030 which is anticipated will be pumping more than 2 billion barrels of crude daily, making it Brazil’s largest oilfield.

While peak oil demand, which is expected to occur in 2030, and sharply weaker oil prices are weighing on petroleum investment, strong demand for Buzios crude oil and low breakeven costs, that are estimated to be $35 per barrel, underscore the reasons for Petrobras’ significant investment in the oilfield.

Brazil is fast shaping up to the world’s premier offshore oil boom. A combination of vast oil potential, extremely low sulfur light and medium crude oil blends, and growing demand from refiners for sweet lighter crude oil coupled with low breakeven costs makes it a highly appealing jurisdiction for investment from global energy majors. For these reasons, investment will keep flowing into Brazil’s pre-salt oil basins bolstering the Latin American country’s proven oil reserves and production despite the headwinds posed by the COVID-19 pandemic, sharply weaker oil prices, and the emergence of peak oil demand.

By Matthew Smith for

To: kidl who wrote (2120)12/8/2020 4:31:14 AM
From: elmatador  Respond to of 2172
Traders Quit Banks to Earn $4.8 Million Hedge Fund Salaries in Brazil

As hedge funds around the world shrink because of low returns and high fees, one country is bucking the trend: Brazil, where traders are quitting their bank jobs in droves to try their luck at potential multimillion-dollar payoffs.

Traders Quit Banks to Earn $4.8 Million Hedge Fund Salaries in Brazil
By Cristiane Lucchesi , Felipe Marques , and Vinicius Andrade

7 de dezembro de 2020, 11:00 WET Updated on 7 de dezembro de 2020, 14:58 WET

Star traders can rake in pay deals of $20 million a year

Banks are losing top executives lured by the booming industry

As hedge funds around the world shrink because of low returns and high fees, one country is bucking the trend: Brazil, where traders are quitting their bank jobs in droves to try their luck at potential multimillion-dollar payoffs.

“New asset-management firms are raising money and posting fast profits, so they have a lot to spend on traders’ compensation,” Leon Goldberg, a partner at XP Inc., Brazil’s biggest brokerage, said in an interview. “Many of them are taking talent away from competitors.”

Senior executives in Brazil are abandoning long careers at major banks including JPMorgan Chase & Co., Credit Suisse Group AG and Itau Unibanco Holding SA to create their own hedge funds and equity funds, lured by the chance for more independence and fatter paychecks. Several firms are poaching each other’s ranks as the fight for talent intensifies.

A top hedge fund trader can earn more than 25 million reais ($4.8 million) a year in Brazil, with a handful of the biggest asset-management stars hauling in as much as 100 million reais in total compensation, according to people familiar with industry pay levels. Bank executives running an asset-management unit or proprietary-trading desk rarely make more than 15 million reais, the people said, asking not to be identified discussing private compensation policies.

Hedge funds have other advantages, too.

“When you’re a partner at your hedge fund, you don’t have a compensation cap as you do in a bank,” said Ricardo Amatto, a partner at executive search firm Heidrick & Struggles in Brazil. “Also, almost all banks defer bonuses and other payments linked to performance for three to four years, while in a hedge fund you get all your money at once.”

There’s more. Partners at a hedge fund firm receive most of their compensation through dividends, Amatto said, and those payments are tax-free in Brazil. At a bank, compensation is taxed at 27.5%.

“So you can see why so many senior people left banks to become fund entrepreneurs,” Amatto said.

Among the major departures: Sylvio Castro, Credit Suisse’s former chief investment officer for the private-banking unit in Brazil, who left to create his own hedge fund. The chief executive officer at Itau’s asset-management unit departed this year to launch a new firm, after his predecessor did the same about a year before. Jorge Oliveira, a former JPMorgan executive, joined a hedge fund founded by JPMorgan veteran Giovani Silva -- replacing an executive who left to create his own company.

Brazil’s $1.1 trillion local asset-management industry is the biggest in Latin America, and it’s historically been controlled by big banks that invested customers’ funds mostly in plain-vanilla products. That was good enough when returns hovered around 14% four years ago. Now that the nation’s benchmark rate has tumbled to just 2%, below inflation, investors are more than willing to pay as much as 2.5% a year in management fees, plus 20% in performance fees, to try for higher returns at a hedge fund.

“Low interest rates are fueling growth dreams for asset managers,” said Patrick O’Grady, chief executive officer at Vitreo, an investment firm and broker-dealer with 7 billion reais under management.

That’s held true even through the pandemic, as the central bank kept liquidity flowing by injecting more than 1.1 trillion reais into the financial system. Hedge funds posted record inflows of 88.8 billion reais this year through October in Brazil, after raising 77.3 billion reais last year, according to Anbima, the nation’s capital-markets association.

“There are still about 7 trillion reais invested in fixed-income products in Brazil, with negative real returns, so the migration to riskier assets such as stocks should continue,” said Sara Delfim, who helped found Dahlia Capital in 2018 after nine years at Bank of America Corp. “The outlook for the local fund industry remains positive.”

It’s a stark contrast to what’s happening globally. Worldwide, hedge funds this year posted almost $55 billion in outflows through October, after losing $102 billion in 2019, according to data compiled by eVestment. Investors have dumped them in favor of cheaper, passive products after years of suffering through returns that trailed benchmark indexes.

In Brazil, firms such as Genoa Capital Gestora de Recursos are reaping the rewards. Launched in June, the firm’s hedge fund amassed almost 7 billion reais for its flagship investment vehicle within two months of its inception, and is now closed for new investments. Founded by Andre Raduan, Mariano Steinert and Emerson Codogno, veteran traders at Itau’s asset-management unit, the fund charges 1.9% to 2.5% in management fees and 20% in performance fees.

Industry pioneers are also grabbing a slice. Andre Jakurski’s JGP Asset Management, which has more than 27.5 billion reais under management, posted inflows in recent years, as did Luis Stuhlberger’s Verde Asset Management, with over 46 billion reais in assets.

Though new shops are opening at a breakneck pace, their profitability and survival is hardly guaranteed.

“Asset management is a scale business,” Amatto, the executive recruiter, said. “You need to grow to be profitable and to perform. So I see many people who start with costs too high, underestimating the risks and the competition.”

Ninety new funds were created just this year, according to Anbima, but about 28 closed in the same period. To survive, some firms may need to merge to gain strength.

“There’s always room for asset managers that deliver returns,” said industry veteran Jose Tovar, CEO of Truxt Investimentos, which oversees about 18 billion reais. “The challenge is delivering -- and fast.”

(Updates with other executive departures in ninth paragraph.)

To: kidl who wrote (2120)1/6/2021 12:08:25 AM
From: elmatador  Respond to of 2172
Can Anything Stop Brazil’s Massive Oil Boom?

By Matthew Smith - Dec 29, 2020, 12:00 PM CST

With Brent trading at $51 per barrel and Lula selling for $53 a barrel, there is considerable incentive for Petrobras to bolster production from those fields. Aside from strong demand from Asia refiners for Brazil’s pre-salt crude oil, stronger than expected domestic fuel demand is also driving the Latin American country’s massive offshore oil boom.

The COVID-19 pandemic had a sharp impact on oil prices, creating considerable uncertainty over the outlook for energy demand around the globe. The ongoing global crude oil supply glut and claims that peak oil demand could occur sooner than anticipated are also weighing on energy prices. Those headwinds have done little to impede Brazil’s massive oil boom. Growing demand for lighter sweeter crude oil grades from Asia, coupled with stronger than expected domestic demand for gasoline are buoying Brazil’s oil industry. China’s insatiable demand for lighter sweeter crude oil grades, sparked by the introduction of IMO2020 on 1 January 2020 which significantly limits the sulfur content of maritime fuels, is an important driver of Brazil’s offshore oil boom. For November 2020, China, the world’s second-largest economy, imported on average just over 11 million barrels of crude oil daily, representing a 10.1% increase over the previous month, although it was still almost 1% lower than a year earlier. Brazil has become a key supplier of crude oil for Asian refiners. By the end of October 2020, Latin America’s largest oil producer had become the third-largest supplier of petroleum to China. This was because of the rapidly growing popularity of its sweet medium grade Búzios and Lula crudes, which because of their low sulfur content are cheaper and easier to refine into IMO2020 compliant fuels. The introduction of IMO2020 is having a notable effect on demand and pricing for low sulfur content medium and light crude oil grades, with maritime fuel expected to grow by almost 1% this year from 2019 when it was a $149 billion market that accounted for around 5% of crude oil consumed globally. Seaborne trade accounts for around 90% of total world trade volumes, highlighting its importance to the functioning of the global economy. This explains why IMO2020 had such a significant effect on demand for sweeter crude oil varieties and was responsible for causing Brazil’s Búzios and Lula grades to sell at a premium to the international Brent benchmark price. According to data Lula is trading at a 5% or $2.78 per barrel premium to Brent. While prices are not readily available for Búzios, according to Petrobras it sells at a premium to Brent in Asia.

Growing demand for the sweet crude oil grades produced by Brazil’s pre-salt oilfields sees Petrobras focused on developing its pre-salt operations. Brazil’s national oil company has budgeted capital spending for exploration and production activities of $46.5 billion from 2021 to 2025.

Those upstream projects being approved for development must have a breakeven price of $35 per Brent or less. Petrobras has earmarked 70% of that budget for its pre-salt oilfields, notably Búzios where 36% of the total amount will be spent. The premium price paid for Búzios crude oil is a key reason for Petrobras’ focus on expanding operations at the deep-water Búzios oilfield.

The state-controlled oil company plans to deploy four new FPSOs in Búzios between 2022 and 2025 as well as boost the number of producing wells to 29. Petrobras recently reported it had completed the drilling of a new well at the Búzios field where it found what it described as “oil of excellent quality”. That will give Petrobras’ and Brazil’s pre-salt oil production a solid lift.

The integrated energy major is also racing ahead with developing its wholly-owned Itapu field which is expected to produce first oil next year, three years earlier than originally planned. That oilfield is will pump crude oil of a similar grade to Búzios, meaning it should also sell for a premium to Brent.

The Lula and Búzios fields feature low breakeven prices which, along with the oil produced trading at a premium to Brent, enhances their profitability. According to Petrobras, the ultra-deepwater Búzios and Lula fields are pumping crude oil with a breakeven price of less than $35 per barrel.

With Brent trading at $51 per barrel and Lula selling for $53 a barrel, there is considerable incentive for Petrobras to bolster production from those fields. Aside from strong demand from Asia refiners for Brazil’s pre-salt crude oil, stronger than expected domestic fuel demand is also driving the Latin American country’s massive offshore oil boom.

According to Bloomberg fuel consumption in Latin America’s largest economy recently surged past pre-pandemic levels and will continue to strengthen going into 2021. Demand for Petrobras’ low sulfur content fuel is firm and will grow because of the global push to significantly reduce sulfur emissions.

These developments were responsible for Brazil’s October 2020 pre-salt oil output (Portuguese) ratcheting up by a notable 6% compared to a year earlier, to average just over 2.5 million barrels daily. This sees offshore pre-salt oil production responsible for 85.5% of Brazil’s total oil production compared to 81% for the equivalent period during 2019.

Nevertheless, spending cuts by energy majors including Petrobras and the shut-in of uneconomic wells because of the pandemic, were responsible for Brazil’s overall October hydrocarbon production falling 2.6% year over year to an average of just under 3.7 million barrels of oil equivalent daily.

Clearly, while the pandemic has hit Brazil’s oil industry causing production to fall because of savage budget cuts and well shut-ins it appears to have done no material long-term damage. There are signs that pre-salt oil production will keep growing at a solid clip fueled by demand from Asian refiners.

That will be further boosted by stronger demand for crude oil and refined products as vaccines are rolled out, the pandemic eases and the global economy returns growth. It has been estimated by the U.S. EIA that world oil consumption will rise by 6% year over year during 2021 to 98 million barrels daily. For these reasons Brazil’s oil production will grow significantly with Petrobras, which for October was responsible for 73% of the country’s oil output, targeting oil production of 2.7 million barrels daily by 2025.

By Mathew Smith for

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To: kidl who wrote (2120)2/8/2021 3:58:06 PM
From: elmatador  Respond to of 2172
White House says it aims to strengthen ties with Brazil, but will speak out on concerns

Joe Biden is changing his rhetoric post elections. He is being pragmatic here.

Pretty soon he will be telling John Kerry to shut up and let the businessmen do the talking.

He will still invite Jair Bolsonaro to the White House.

To: kidl who wrote (2120)5/4/2021 11:30:07 AM
From: elmatador  Respond to of 2172
COVID peak looks behind
USD are flooding: Prices from Iron Ore, Coffee, Oil to Soft Commodities are booming
Companies including $VALE $PBR $SID $USNZY are making tons of money. EV at the low end
In a world where liquidity floods is time to buy while its cheap

Brazil, Slowly Drags Itself Through Pandemic Nightmare As Market Gets Bullish

Kenneth Rapoza
Senior Contributor

I write about global business and investing in emerging markets.

KMR IMAGESRemember Brazil’s P1 Covid-19 variant that sent the country back into lockdown? Things are calming down now. Brazil is a “buy at the sound of cannons”. In fact, you may even be a few weeks late.

As investor Fernando Pertini says in his above Tweet last week, which he pointed out to me in a private conversation, the commodity bull is always good for Brazil.

“I am long EWZ and see it as well-positioned at the intersection of the inevitable end of Covid and a bout of reflationary dollar weakness as a result of a Liberal spend-a-Rama Fed,” says Brian McCarthy, head of Macrolens, an investment research firm in Stamford, Connecticut.

Spenda-a-Rama means rich bulge bracket banks like Goldman Sachs GS -1.9%, and high net worth individuals in the States with money all over the place will have more gains from their securities and will look elsewhere in the world. They’ll rediscover Brazil.

The iShares MSCI Brazil EWZ -1.2% exchange traded fund approached another 2021 bottom in early March. That was the perfect time to buy. Right now, it’s trading above its 50- and 200-day moving averages. Momentum is still strong. It’s not overbought.

EWZ. Laggard YTD.

YAHOO! FINANCEI like this chart because I have been selling all my old Petrobras positions (of which I have many still) and buying them back in a wash sale at $8 and change. This is a $5 to $12 stock. That’s the range this thing travels in. I now have enough Petrobras to sink a battleship.

Brazil’s Bovespa Index has not yet reached its January-level high of 125,077 points. To see how investors see the future, open interest in the options market is as good a crystal ball as any the market has to offer.

Open Interest is data published daily by the stock exchanges about the number of open contracts due on a certain date. In the case of options, these are called the "expiration dates.”

How are “the sharks” in Sao Paulo positioned for Brazil as it slow-walks out of its pandemic nightmare?

“There are a lot more calls than puts in each strike above the strike of 119.000 points on the Bovespa Index,” says options specialist Daniel Coelho Barbosa of Vandermart Solutions. Calls are options that give you the right to buy a security at a certain price and puts give you the right to sell a security at a certain price. In this particular case, it’s options of the Bovespa Index.

“We see that there are many big players (Bovespa options are expensive) that have huge amounts of calls sold naked,” says Barbosa. “Naked" is when you believe the option price will never be met. “It's free money if the Bovespa never gets there because the calls will soon expire in May,” he says, meaning investors there believe they are buying on a discount and that’s good for long investors who believe the Brazilian stock market will pull even farther ahead in June.

In fact, looking at the same data for June, call options above the 120,000 point break are the most popular.

You can see option interest for the Bovespa Index here.

According to EPFR Global, in the week ending April 30, Brazil equity funds extended their longest outflow streak since the height of the pandemic’s first wave last March. The region’s largest economy is wrestling with the pandemic, which has killed nearly 400,000 people, an inflation rate at a six-year high and a weak president.

As far as the “Brazilian Fed” goes, their central bank says it will pursue only a “partial” adjustment in monetary stimulus in the coming months, with the focus on rising inflation.

The market expects interest rates to remain at stimulatory levels until year end. And then next year will see higher rates. Still, if Brazil is climbing out of the pandemic by then, and if the commodity cycle is still strong, there is nothing but wind at Brazil’s back.

Bolsonaro in the Gutter, But No ‘Pink Wave’

Jair Bolsonaro, the so-called Tropical Trump, is in worse shape than Trump ever was. His approval rating started the month of April in the 30s. Some 60% disapprove, according to pollsters Poder360.

This month just started, but last month started off like this for Bolsonaro, as TS Lombard analyst Elizabeth Johnson highlights:

Resignation of the commanders of all three branches of the armed forces highlights tepid support for Bolsonaro among members of the military, his base;A cabinet reshuffle put the spotlight on Bolsonaro’s political weakness, so he has had to cede more power to the Congress, which are centrists by the way

He is up for re-election next year. Ex-con and ex-president Luiz Inacio Lula da Silva is — potentially — breathing down his neck. Could he run and win? Personally, I think Brazil is over Lula and the fact that he has had to go on a world tour to sell himself to the liberal media in Europe on how fit he is tells me that he is desperate for press, and desperate for relevance. If he is not getting it in spades in his own domestic press, then he knows he can get it from the British and the French media who still think it’s 2002 in Brazil. My guess is that his European press tour is really about Lula putting feelers out for fund raising in 2022 for “progressive billionaires” to fund the Workers’ Party.

This is not to say that Bolsonaro has struggled through the pandemic. Like Trump, he caught Covid-19 and survived it. And like Trump, he also distrusts his national press, which has been using a “death by a thousand cuts” strategy on Bolsonaro since he got elected. After rifling through three pro-Wuhan style lockdown Health Ministers, Bolsonaro — suffice to say — did not trust what he was hearing or reading about the pandemic and was soft in his fight against it.

“In a country where the informal economy is colossal, where there are more than 70 million workers living in precarious situations and without proper social protection, anger has risen against Bolsonaro’s downplaying of Covid,” says French journalist and editor-in-chief at aleurs Actuelles, Virginie Jacoberger-Lavoue. She recently wrote a book about Bolsonaro, loosely translated into English to mean Brazil and Bolsonaro’s Wild Ride, published by Rocher.

“Bolsonaro knows what awaits him in 2022. He will have to confront the dead of Covid-19 to convince people to vote for him,” she says. “He will have a hard time escaping from that.”

The unknown is where people will be a year from now, or even six months from now. There is just no way that the majority of Brazilians are fine with lockdowns and restrictions after millions of them have already contracted the virus and survived it.

Moreover, Brazil has probably moved on from Lula, Bolsonaro’s most visible threat, but surely not the only one.

I don’t see anyone from the far left of Lula’s Workers’ Party coming forward as a new voice to lead a “pink wave” in Brazil (and Latin America). Nor do I see anyone from the marginal PSOL party, a favorite of the globe trotting left-wing media and arts influencers in Brazil.

It’s too early to game that out and I am definitely not watching Brazil’s politics closely anymore. Right now, the market is looking for Covid to pass, not Bolsonaro.

If Brazil comes out of the pandemic once and for all at any point this year, then lockdowns and other restrictions end and Brazil surely does better than any other nation in Latin America except for maybe Mexico. EWZ will surely catch up to the iShares MSCI Mexico fund, no doubt about it.

Brazil has been vastly underperforming Mexico for the last three months. Only in the last four weeks ... [+]

YAHOO! FINANCEOver the weekend, Bolsonaro fans took to the streets of Rio de Janeiro, Sao Paulo, and Brasilia. The media complained that no one was in masks, but that goes without saying.

I also suspect the U.S. will also send extra Pfizer and Moderna vaccines to Brazil at some point in the near future, probably during our early summer months. Whether or not Brazilians take them is another story, but any headline of the sort would drive markets higher.

As a Brazil investor, I cannot tell from here if Bolsonaro’s weekend crowds were bigger, smaller or the same as they were when he swept into power. Bolsonaro will need sustained numbers like that next year. More important than Bolsonaro, Brazil will need to move on from Covid-19 sooner rather than later. It does not have the resources to keep its economy in second gear for long.

To: kidl who wrote (2120)9/16/2021 10:38:04 AM
From: elmatador  Respond to of 2172
Brazil Looks To Become A Top-5 Oil Producer

Fri, September 10, 2021, 12:00 AM·5 min read

In a little over a decade Latin America’s largest economy Brazil has become a leading global oil producer. At the end of 2020, Brazil was not only pumping the most oil in Latin America, an average of 3.03 million barrels daily, but finished ranked as the world’s seventh largest producer behind OPEC member Iraq and ahead of the United Arab Emirates.

According to Brazil’s Mines and Energy Minister Bento Albuquerque, Latin America’s top oil producer will become the world’s fifth-largest petroleum exporter by the end of this decade.

Brazil’s government is forecasting that the country will be pumping 5.3 million barrels of oil per day by 2030 facilitating its ability to substantially boost exports.

That is compared to an average of 3.05 million barrels of crude oil and condensate production per day for July 2021 and an average of 2.94 million for the first seven months of 2021. This indicates that there is still considerable work to be completed if Brazil is to achieve such an ambitious target.

Despite ructions, earlier this year sparked by President Bolsonaro’s dismissal of Petrobras CEO Roberto Castello Branco who was replaced by former Defense Minister Joaquim Silva e Luna, production continues to grow. Even the considerable fallout from the COVID-19 pandemic has done little to blunt Brazil’s monumental offshore oil boom.

Data from Brazil’s National Agency of Petroleum, Natural Gas and Biofuels shows that by July 2021 the country was pumping on average 3.9 million barrels of oil equivalent per day, a 4% increase month over month and 0.6% higher than a year earlier.

It is Brazil’s prolific offshore pre-salt oilfields that are driving the country’s production growth. During July 2021, pre-salt oil production jumped by 3.7% compared to a month prior and 4.1% year over year to 2.8 million barrels per day.

It is the giant Tupi oilfield, which since starting production in 2010 pumped more than 2 billion barrels of crude oil and is Brazil’s largest producing field pumping 916,826 barrels of petroleum per day during July 2021.

That is followed by the 210,000-acre Buzios oilfield, which for the same period pumped 569,648 barrels of crude oil, making it Brazil’s second largest field.

Buzios, the world’s largest deepwater offshore oilfield with the capacity to pump 600,000 barrels daily from 4 FPSOs and a network of 45 completed wells, is the engine for Brazil’s planned crude oil production growth.

Brazil’s National oil company Petrobras plans to invest $17 billion in the deep-water field between 2021 and 2025 which will see 8 FPSOs added in less than a decade lifting production capacity to at least 2 million barrels per day.

That means the supergiant offshore field will be producing up to an additional 1.4 million barrels daily by 2030 or around 61% of the planned additional production of 2.3 million barrels per day by the end of the decade.

Buzios crude oil has an API gravity of around 28 degrees and 0.32% sulfur content which are similar characteristics to Brazil’s Lula oil variety which is extremely popular in China.

Like Lula, Buzios is low sulfur and metals content crude oil grade which with a pour point of around 9 degrees indicates that it is relatively low in paraffin. Those characteristics make it not only cheaper and easier to refine into higher quality low emission fuels than heavier sour varieties of crude oil, but also suitable for blending with lower quality grades to produce higher-quality feedstock for refining.

It is for those reasons that Buzios became highly popular among Asian refiners during 2020 as demand for sweet higher quality light and medium grade crude oil skyrocketed after the introduction of IMO2020 last year.
China is now a key market for Brazilian crude oil with the volume of imports from Latin America’s largest petroleum producer soaring during 2020, seeing it become the third-largest crude oil supplier to the world’s second-largest economy.

The volume of petroleum China is importing from Brazil has, however, steadily fallen since the start of 2021 with Latin America’s largest oil producer seeing July petroleum cargoes to China plunged by 47% compared to a year earlier.
That has caused Brazil to slide from being the third-largest source for China’s crude oil imports to fifth place behind Angola at fourth, Iraq in third, and Russia then Saudi Arabia ranked second and first respectively.

Nevertheless, it is an energy-hungry China that will remain the primary consumer of Brazilian crude oil. The world’s second-largest economy is expected to pull ahead of the U.S. during 2021 to become the largest refiner globally.

That, coupled with a return economic growth as pandemic impacts ease, will drive higher consumption of fuels. Demand for high-quality low sulfur and metals content crude oil is growing at a solid clip, primarily because of ever-stricter emissions regulations and the fact that it is easier as well as cheaper to refine.

That is further bolstered by Asia being a key global shipping hub with Singapore, the world’s number one ranked bunkering port by volume, and Hong Kong the fourth largest. China’s production of maritime fuels is rapidly expanding, causing demand for sweeter low contaminant IMO 2020 crude oil grades to soar.

For those reasons, demand for sweet high-quality crude oil remains strong in Asia. In fact, according to energy industry analysts, China’s refiners are reputedly paying premiums on certain crude oil imports to secure November 2021 supplies now that pandemic restrictions are easing.

Those events will ensure that demand for Lula and Buzios crude oil varieties will keep expanding, particularly as China’s economic growth and refining activity ratchets upward.

The strong demand outlook coupled with the prolific pre-salt oilfields’ low breakeven prices estimated to be on average below $35 per barrel, and high-quality crude oil grades is attracting solid investment inflows from foreign energy majors. Those along with Petrobras’ planned $17 billion investment in the Buzios field will support Brazil’s forecast production growth, allowing Latin America’s largest economy to become the world’s fifth-ranked oil exporter.

By Matthew Smith for

To: kidl who wrote (2120)10/12/2021 4:03:19 AM
From: elmatador  Respond to of 2172
In 2020, despite the pandemic, Brazil raised almost 20 billion dollars (110 billion reais) thanks to this, and this year it should significantly surpass that figure.

In addition, it is one of the countries that are benefiting most from not being part of the Organization of Petroleum Exporting Countries (OPEC) cartel, which in recent years has imposed quotas on its members to reduce total supply and stabilize the market.

By being exempt from this limit, Brazil took the opportunity to increase its sales to Asia, by far the continent that imports the most oil. “It's the biggest beneficiary of the bloc,” says Lisa Viscidi, head of Energy at the Inter-American Dialogue analysis center. "It exports a lot, mainly to China, and sales remained at high levels even in the worst moments of the pandemic."

Brazil. In a few years, the undisputed regional leader went from being a country affected by the high oil prices, which worsened its trade balance, and started to be clearly benefited.

“Historically, whenever the price went up, it was a tragedy. Now, that's good for him,” says Monaldi. In the meantime, several important discoveries have made the Latin American giant one of the key names on the world oil map and the largest net exporter in the strip of land that runs from Ushuaia to the Rio Bravo.