BMI's Executive Summary

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The latest Brazil Oil & Gas Report from BMI forecasts that the country will account for 30.0% of Latin America regional oil demand by 2011, while providing 23.2% of supply. Latin America regional oil demand rose to an estimated 6.87mn barrels per day (b/d) last year. It should average 7.01mn b/d in 2007 and then rise to around 7.82mn b/d by 2011. Regional oil production was last year estimated at 10.97mn b/d. It is set to rise to 11.85mn b/d by 2011.

In terms of natural gas, the region last year consumed an estimated 183bn cubic metres (bcm), with demand of 271bcm targeted for 2011, representing 48% growth. Production of an estimated 191bcm in 2006 should reach 272bcm in 2011, and implies just 2bcm of net exports the end of the period. Brazil's share of gas consumption in 2006 was an estimated 11.48%, while its share of production was 8.38%. By 2011, its share of gas consumption is forecast to be 10.70%, with the country accounting for 8.82% of supply.

For the whole of last year, our estimates of average crude oil prices are US$61.10 for the OPEC basket, US$65.10 for Brent, US$66.20/bbl for WTI and US$61.30 for Urals. For the first quarter of this year, we have adjusted our forecasts to reflect the weather-induced volatility. The OPEC basket is now expected to have averaged US$54.30/bbl, with Brent at US$57.60; WTI averaging US$58.70 and Urals at US$54.00/bbl. Our projections for 2007 as a whole are barely changed from the last quarterly report. We are still assuming an OPEC basket price average of US$55 per barrel. Based on last year's typical price differentials, this implies Brent at US$58.80, WTI averaging US$59.90/bbl, and Urals at US$55.30/bbl.

Brazilian real GDP growth is forecast by BMI at 3.5% for 2007. We are assuming 3.8% growth in 2008, followed by 4.0% in 2009-11. Partly privatised deepwater specialist Petrobras will continue to partner international oil companies (IOCs) in supporting output growth efforts, while dominating domestic production. We are assuming oil and gas liquids production of at least 2.75mn b/d by 2011, with the country expected to pump 2.15mn b/d this year.

Consumption is forecast to increase by 3-5% per annum to 2011, implying demand of 2.35mn b/d by the end of the forecast period. The export capability would therefore be approximately 404,000b/d by 2011. Gas production is forecast to increase from last year's estimated 16bcm to 24bcm over the period, with consumption climbing from an estimated 21.4bcm to 28.7bcm.

In the BMI Business Environment Ranking matrix, Brazil receives an unchanged composite score of 36, which leaves the country in fourth place out of the nine states included in the Latin America region. The overall business environment can be considered attractive in a regional context, thanks largely to a relatively low level of perceived political and economic risk, plus the country's strong oil output growth potential and a generally effective licensing regime. While the country's reserves to production ratio (RPR) is only just above the regional average, there is no doubt significant scope for upwards revision to reserves estimates. Meanwhile, strong volume growth from the development of offshore fields with IOC involvement puts Brazil among the most attractive countries in the region from an energy perspective.

Contents

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Chapter 1 - Executive Brief

Chapter 2 - SWOT Analysis

Brazil Economic SWOT

Brazil Political SWOT

Brazil Business Environment SWOT

Chapter 3 - Regional Market Overview

Latin America Region

Table: Latin America Oil Consumption (000b/d)

Table: Latin America Oil Production (000b/d)

Table: Latin America Oil Refining Capacity (000b/d)

Table: Latin America Gas Consumption (bcm)

Table: Latin America Gas Production (bcm)

Table: Latin America LNG Exports/(Imports) (bcm)

Brazil

Chapter 4 - Business Environment Rankings

Brazil

Latin America Region

Table: Latin America Business Environment Ranking

Chapter 5 - Brazil Business Environment Ranking

Economics – Long-Term Risk

Politics – Long-Term Risk

Oil & Gas Growth

Oil/Gas Reserves

Licensing/Regulation

Competitive Environment

Chapter 6 - Business Environment Overview

Political Risk Summary

Economic Risk Summary

Business Environment Risk Summary

Legal Code/Red Tape

Foreign Direct Investment

Tax Regime

Chapter 7 - Oil Market Outlook

Table: Crude Price Forecasts 2006

Revised Forecasts

Table: Oil Price Forecasts

Chapter 8 - Regional Supply and Demand

Latin America

Table: Oil Production (000b/d) – Latin America

Table: Oil Consumption (000b/d) – Latin America

Chapter 9 - Global Picture

Table: Global Oil Consumption (000b/d)

Table: Global Oil Production (000b/d)

Chapter 10 - Industry Forecast Scenario

Oil and Gas Reserves

Oil Supply and Demand

Gas Supply and Demand

Refining and Oil Products Trade

Revenues/Import Costs

Table: Brazil Oil & Gas – Historic Data & Forecasts

Other Energy

Table: Brazil Other Energy – Historic Data & Forecasts

Key Risks to BMI’s Forecast Scenario

Chapter 11 - Economic Outlook

Table: Economic Activity - Historical Data And Forecasts

Chapter 12 - Country Snapshot: Brazil Demographic Data

Section 1: Population:

Table: Demographic Indicators (2005)

Table: Rural/Urban Breakdown

Section 2: Education & Healthcare

Table: Education (all figures %)

Table: Healthcare: Vital Statistics

Table: Healthcare: Expenditure

Section 3: Labour Market And Spending Power

Table: Employment Indicators

Table: Consumption and Stratification

Table: Wages per year

Chapter 13 - Regional Case Study

Investment Needed To Fulfil Venezuelan Potential

Strategic Vision

Export Commitments

Regional Position

Chapter 14 - Competitive Landscape

Executive Summary

Table: Key Players – Brazilian Oil & Gas Sector

Overview/State Role

Table: Key Upstream Players

Shell – Summary

RepsolYPF – Summary

Kerr-McGee – Summary

ExxonMobil – Summary

Chevron – Summary

BP – Summary

Eni – Summary

Table: Key Downstream Players

BG – Summary

Statoil – Summary

Mitsui – Summary

Devon – Summary

Chapter 15 - Company Monitor

Petróleo Brasileiro SA – Petrobras

Shell Brasil

Company Analysis

SWOT Analysis

RepsolYPF Brasil

Company Analysis

SWOT Analysis

Esso Brasileira de Petróleo

Company Analysis

SWOT Analysis

Texaco Brasil

Company Analysis

SWOT Analysis

Empresas Petróleo Ipiranga

Company Analysis

SWOT Analysis

BG do Brasil

Company Analysis

SWOT Analysis

BP Brasil

Company Analysis

SWOT Analysis

Statoil do Brasil

Company Analysis

SWOT Analysis

Chapter 16 - BMI Forecast Modelling

How We Generate Our Industry Forecasts

Energy Industry

Cross checks

Sources

Chapter 17 - Appendix: Regional Demographic Data

Wages (ave per annum), US$

Population

Household Spending Per Capita, US$

Private Consumption Per Capita, US$ PPP

Market Size, GDP, US$bn

Network of Latin American Oil & Gas Sources

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BMI's Latin American Oil & Gas Reports are based on an extensive network of multilateral organisations, government departments, oil & gas industry associations, chambers of commerce and company reports. Information sources include: