Brazilian E&P overview

How the brazilian upstream market has organized itself for the last 20 years ater the market opening in 1995, the increase in reserves and production, the arrival of multiple players and the pre-salt discoveries in 2006

The end of Petrobras’ monopoly over Exploration & Production activities in 1995 reshaped the Brazilian upstream Oil & Gas sector. As of 1999, bidding rounds attracted multiple players to the country, resulting in a substantial increase in reserves and production. The pre-salt discoveries, starting in 2006, are the great milestone of this successful path. This section explores how the Brazilian upstream market has organized itself more than 20 years after the market opening in 1995.


By the end of 2017, Brazil had circa of 13.0 billion barrels of proved oil reserves and 370 billion m³ of natural gas. The chart below shows the historical evolution of the Brazilian oil and gas reserves. It is noteworthy that these reserves had been significantly increasing and had more than doubled since 1995, with a decrease after the 2014 oil price crisis. The greatest share of the Brazilian oil (95%) and natural gas (82%) reserves is situated in offshore areas. However, this was not always the case. During the 1970s, Brazil faced significant changes in the E&P structure, characterized by the displacement of activities from onshore to offshore areas. The pre-salt discoveries reinforced this transition. The exploration of deeper and deeper offshore frontiers instilled a culture of technological innovation and rose the country’s production to new heights.


Oil Proved Reserves Historical Evolution (billion barrels)

Source: ANP (2018)


Natural Gas Proved Reserves Historical Evolution (billion m³)

Source: ANP (2018)


It is important to notice that, in the second half of 2014, the Brazilian National Agency of Petroleum Natural Gas and Biofuels (ANP) issued the ANP’s Ordinance No. 47 of September 3, 2014, which aligned the Brazilian classification system for petroleum reserves and resources with the Petroleum Resources Management System’s (PMRS) guidelines. According to the Agency, most of the reduction in proved reserves is justified by changes in the economic assumptions, mainly due to new oil price forecasts and by changes in the methodology to meet the new technical criteria (PRMS).

Brazil currently holds the 15th position in the world oil reserves (ANP, 2018). According to Energy Research Company of Brazil (Empresa de Pesquisa Energética – EPE, 2017), national reserves and production will more than double from 2016 until 2026, being led by the pre-salt development. The new reserves level may change the geopolitical role of Brazil, consolidating its position as one of the major players of the world petroleum industry. 

Brazilian oil and natural gas reserves are highly concentrated in few federal units. Rio de Janeiro held the majority of oil (83,5%) and natural gas (61%) reserves in 2017. Only three states, namely Rio de Janeiro, Espírito Santo e São Paulo accounted in 2017 for 95% of total national oil reserves. When it comes to natural gas, Rio de Janeiro, Amazonas, São Paulo and Espírito Santos held together 90% of Brazilian natural gas reserves in the same year (ANP, 2018).

Rio de Janeiro and São Paulo presented an impressive increase in oil reserves in recent years, as shown below, due to pre-salt discoveries, but have also suffered relevant reductions since 2014.


Rio de Janeiro and São Paulo’s proved oil reserves (million barrels)

Source: ANP (2018)


According to ANP, until the end of 2017, Brazil had 303 exploratory blocks, of which 110 were offshore, 192 onshore and 1 onshore/offshore. Within these blocks 2 were granted in the second concession round, 3 in the third, 2 in the fourth, 6 in the fifth, 27 in the sixth, 37 in the seventh, 27 in the ninth, 5 in the tenth, 99 in the eleventh, 59 in the twelfth, 35 in the thirteenth. There was also one block under a Production Sharing regime (ANP, 2018). 

Petrobras had shares in 123 exploratory blocks, 45 in exclusive concession and 78 in partnership with other companies (ANP, 2018). 

Production development and production 

Brazil had 75 fields in production development phase at the end of 2017, 31 being offshore and 44 onshore, and Petrobras has 100% of the shares in 30 contracts of this total. There were also at this time 371 fields in production phase, of which 98 offshore and 273 in onshore. Petrobras was the sole concessionaire in 284 production fields and operator of the consortium in other 13 fields.


Other oil companies in Brazil 

Other companies that have contracts, in partnership or not with each other and with Petrobras, are: Alvopetro, Barra Bonita, Barra Energia, Brasoil Manati, BP Energy, Chevron Brasil, CNODC Brasil, Dommo Energia, Energizzi Energias, Engepet, Espigão, Geopark Brasil, Guindastes Brasil, Imetame, Newo, Nord, Oeste de Canoas, OP Energy, Orteng Óleo e Gás, Parnaíba Gás Natural, Perícia, Petroborn, Petrogal Brasil, Petrosynergy, Phoenix, Queiroz Galvão, Silver Marlin, Sinochen Petróleo, Shell Brasil, Statoil Brasil, Total E&P do Brasil, Ubuntu Engenharia e Vipetro.


The oil production in Brazil almost quadruple since the deregulation of the E&P market in 1995. In 2017, Brazil produced 2.622 million barrels per day of oil and 110 million m³ per day of natural gas.


Oil Production Historical Evolution (thousand barrels per day)

Source: ANP (2018)


Natural Gas Production Historical Evolution (million m³/d)

Source: ANP (2018)


Onshore fields have been showing decrease of their relative participation in oil and natural gas production expressly over the last ten years. This reduction reveals the shift of production from onshore to offshore areas, a transition that began in the 1970s with the discoveries in Campos Basin.

In 2008, the first Pre-salt field, Jubarte field in Campos basin, started production. However, the milestone of Pre-salt production occurred with the production start, in 2010, of the Lula field, in Santos basin. The graph below shows that the production coming from Pre-salt was responsible for the majority of Brazil’s production increase since 2010, reaching the remarkable average monthly production of 1.0 million boe/day in July 2015. In 2016 , Pre-salt already accounts for 36% of total Brazilian production.

Brazilian Oil and Natural Gas Historical Production (Million boe/day)

Source: ANP (2018)

According to the EPE, the Brazilian oil production may reach 5.2 million barrels per day by 2026, while natural gas production may surpass 182 million m³ per day in the same year.





Total reserves: sum of proved, probable and possible reserves of each oil or gas field, according to ANP registers. Contingent Resources: refers to the Discovery Assessment Plans (PAD). Undiscovered resources contracted: untapped resources within licensed areas.Undiscovered resources: untapped resources within unlicensed areas.


Brazilian Oil and Natural Gas' Production Forecast (Million boe/d)

Source: EPE’s 10-Year Energy Plan 2026 (2017) 


As can be seen in graph, the greatest share of production increase as of 2020 would come from contingent resources, mainly pre-salt resources. Within the density of the oil, EPE estimates that the type classified as medium would be the main type of oil produced during the decade, reaching 84% of the total production in 2026 (EPE, 2017). 

It is worth noting that EPE’s forecasts are subjected to a series of technical and economic assumptions that may change over the time.


Because of the market opening in 1995, Brazil moved from a legal monopoly held by Petrobras to a competitive environment formed by a good mix of local (50) and foreign (47) concessionaires in the E&P segment, thus totaling almost 100 oil companies currently registered in the ANP. In 2017, there were 30 operators producing oil and 28 ones producing gas in Brazil, but Petrobras was responsible for 94% and 95% of the national oil and natural gas production, respectively.


Oil Production by Operator (2017)

Source: ANP (2018)


Natural Gas Production by Operator (2017)

Source: ANP (2018)

Considering the production per concessionaires in Brazil in 2017, Petrobras was responsible for 77,8% of the oil and 76,6% of the natural gas produced. Thus, the O&G production in Brazil is more diversified when considered the production per concessionaires, with other oil companies being more representative such as Shell, Repsol - Sinopec, Petrogal, Statoil, Sinochem, Parnaíba Gás Natural and Queiroz Galvão.


Oil Production by Concessionaire (2017)

Source: ANP (2018)


Natural Gas Production by Concessionaire (2017)

Source: ANP (2018)


Once the blocks acquired by foreign and local oil companies at the last ANP bidding rounds starts to develop O&G production, apart from Petrobras, as much as the later concludes its divestments of blocks/fields, the market tends to be more diversified in Brazil.  

Imports and Exports

The exploratory efforts of Petrobras and other players resulted in significant changes in the oil domestic supply. Production increase led to the decrease of imports, therefore reducing Brazilian dependence on imported oil. Since 2006, Brazil has been strengthening its position as an oil net exporter, which is a remarkable point in oil history of the country, when it reached self-sufficiency. Between 2011 and 2013, net imports increased due both to an internal consumption increase and a production cutback, recovering its downward trend in 2014. The oil exports reaching approximately of 1 million of barrels in 2017 is also a milestone.   


Brazilian Oil Historical Production, Imports and Exports (Thousand barrels per day)

Source: ANP (2018)


The Brazilian oil imports in the last 10 years came mainly from Africa (66%) and Middle East (29%), more specifically from Nigeria and Saudi Arabia (ANP, 2018).


Oil Historical Imports by Region (Thousand barrels per day)

Source: ANP Statistical Yearbook 2018


The regions of Asia Pacific (39%), Central and South America (27%) and North America (23%) were the destination of 88% of the Brazilian oil exports from 2008 until 2017. Asia Pacific region has been gaining importance in the Brazilian oil exports portfolio in the last years, driven by China and India (ANP, 2018).


Oil Historical Exports by Region (Thousand barrels per day)

Source: ANP Statistical Yearbook 2018


Brazil may consolidate its new geopolitical role as net oil exporter in the near future, mainly because of the pre-salt's recent discoveries and untapped resources.

Final remarks

The dominant position of Petrobras in the oil supply chain fosters the permanence of cooperative strategies of major international players to entry the Brazilian upstream market.

Due to international oil prices drop and internal crisis consequences, Petrobras is focusing its activities on strategic assets (deep-waters) and is running a big divestment plan that may make room for new companies not only through partnerships, but also through assets acquisitions. The legislation changes implemented in the E&P regulation in Brazil, as described in the regulatory framework section, together with the multiannual-bidding calendar implemented recently, might also contribute effectively to diversify and boost the O&G production in the country.

The results of these deals and the upcoming bidding rounds will shape the E&P competitive environment in the near future.

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