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Gabriela Castro-Fontoura, owner of Sunny Sky Solutions, discusses the Brazilian oil and gas market

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he B of the BRICs, Brazil is Latin America’s largest economy. With a GDP of USD 2.4 trillion in 2012, it is also the world’s eighth largest economy. Economic growth has been positive but slower this year than expected: four per cent growth rates were revised down to 2.5 per cent during the year. The country battles inflation, currently six per cent, far from the 4.5 per cent target. Macroeconomic policy is also focusing on controlling the value of the Real, the national currency, while encouraging investment. Long-term economic challenges remain, such as competitiveness and productivity. Home to 194 million people, with 40 million recently shifted out of poverty and into the growing middle class as a result of strong social policies, the country is also the target of foreign businesses and investors who see it as a difficult-to-ignore market for their exports. Added to this is the allure of the forthcoming 2014 FIFA World Cup and the 2016 Olympic Games, which will bring further attention, investment and people to the South American giant. Within this context, oil and gas means big business in Brazil. Proven oil reserves in 2012 were just over 15 billion barrels, most of this offshore. ANP (Agência Nacional do Petróleo, Gás Natural e Biocombustíveis - the national agency for oil, gas and biofuels) also estimates daily gas production to be 70.8 million m3 in 2012 and natural gas reserves to be 459 billion m3. More reserves are also being found, such as those off the coast of Sergipe in October 2013. Brazil is now officially on the world map as an oil exporter, following the tradition of other Latin American nations such as Venezuela and Mexico. In 2012, the main destinations for Brazilian oil exports were the US, China and India. The country’s main oil reserves, discovered in 2007, lie within the pre-salt, an area that has increased Brazil’s oil reserves by 50 per cent compared to ten years ago. Oil in the pre-salt area is notably difficult to extract and huge investment is needed. Discussing oil and gas in Brazil is not possible without mentioning Petrobras, the partially state-owned energy multinational giant. Petrobras’ crude oil production in 2012 was about two million barrels. Ranked 22nd on the list of most powerful Latin American companies in 2013

by America Economia, Petrobras has faced private (foreign and national) competition only since 2003 when Shell started production. Petrobras has a renewed image and is at the forefront of many technological and managerial developments in Brazil. For example, it has its first ever female CEO (Maria das Graças Silva Foster) since 2012. The company is a priority for President Dilma Rousseff, who in the past served as energy and mining minister. In its 2013-2017 business plan, Petrobras sets an investment target of USD 236.7 billion, of which USD 147.5 billion will be in exploration and production, and USD 73 million of that budget is destined to the pre-salt area. In order to focus on offshore exploration within Brazil, Petrobras has recently been raising funds through the selling of some of its own overseas assets, such as the Colombian deal with

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