Petrobras CEO, José Sergio Gabrielli de Azevedo, said that Brazil will be one of the main contributors to the increase of oil supply in the global market and stressed that demand continues to increase in developing nations. This Tuesday (Oct 18) Mr. Gabrielli took part in a ministerial meeting organized by the International Energy Agency (IEA), in Paris.
“There is a shift taking place in the energy industry,” he said in an address during a luncheon with ministers and sector corporate CEOs.
Mr. Gabrielli said that demand for oil is migrating from European countries, the United States and Japan to emerging nations such as Brazil, China, Russia and South Africa. “This is a major transformation in oil geopolitics and market logistics,” he remarked. According to the executive, the IEA has shown that, contrary to the expected, the global demand for oil rose during the crisis.
In Brazil, demand for oil grew 10.5% and was up 19% for gasoline in 2010, he noted. Consumption is expected to increase from the current 2.2 million barrels of oil per day (bpd) to between 3 and 3.3 million bpd in 2020. “Petrobras will increase its daily oil production capacity by 2.3 million barrels, and its net output will be up by about one million barrels in 2015. In 2020, it will produce nearly 5 million barrels of oil per day in Brazil,” he said.
He also explained that the volatility oil price is caused by high levels of liquidity and low interest rates. “The volumes of oil traded in the signed financial contracts are nine times higher than those of the actual contracts. This causes price volatility and makes oil a financial commodity,” he observed.
Investments in refining
Establishing the relationship between the current scenario and the role Petrobras is expected to play, Mr. Gabrielli stated that Brazil needs to “increase investments in the refining capacity. There are vast opportunities for investments in places like China, the Middle East, Africa and Brazil. These markets are growing. There will be more and more demand in emerging nations.” Mr. Gabrielli mentioned other areas in which the Company will invest over the coming years: “We will invest not only in the refining capacity, but also in developing means of communication, robotics, safety procedures, logistics and information technology, among others. This is an obligation Petrobras must and will take on.”
Petrobras’ CEO also took part in a press conference with IEA chief economist Fatih Birol, and Fulvio Conti, the CEO of Italian energy company Enel. Mr. Birol explained that ten trillion dollars will have to be invested over the next 25 years in order to meet the demand for oil that is projected for 2035. Petrobras will invest US$224.7 billion by 2015, noted Mr. Gabrielli. In his address, he summarized the main subjects brought up during the debate held in the morning: demand for oil products will continue on the rise; economic accessibility will be a key issue; the security of the current production is of the utmost importance; and, in sum, there will be a need for new sources of production, one of which will be Brazil.
The Company’s CEO also highlighted the need to increase the capacity of the supply chain and the challenge of combining the growing demand with lower emissions. “This can be achieved with new fuel alternatives and more efficient use of current sources of energy,” he said.
The main theme of the IEA ministerial meeting is “Our energy future: secure, sustainable together.” It will bring together in Paris, until tomorrow, government authorities from member states (the United States, Europe and Japan), to guest nations, such as Brazil, China, India, Russia, Chile, Mexico and Estonia, in addition to representatives of the energy industry.
Source: Petrobras, October 19, 2011