Oil and natural gas are vital for modern society. Whether because of its use as a fuel, as a source of energy, or even as raw material for the most diverse industrial and commercial segments in the world.
However, some of the biggest nations worldwide can’t count on their own production needed to satisfy their own demand, and that’s when other countries take on an extremely important role. This is the case with Brazil.
If you’d like to understand more about how fundamental is the Oil & Gas sector for the Brazilian economy, let us dive into this subject to learn more.
An Overview of the Brazilian Economy in 2022
First of all, it is worth taking some time to talk about how the Brazilian economy—currently considered the 10th biggest economy in the world—is composed.
Currently, our economic scenario is very diverse, covering the three sectors—primary, secondary, and tertiary. The idea that we depend on monoculture is long gone, as well as the idea that only a certain kind of industry was responsible for the internally produced wealth.
The great flagship of the Brazilian economy is agricultural production, given that we are one of the largest global exporters of soy, chicken, and orange juice. We have also achieved the highest place in the global rank of sugar and sugarcane products, cellulose, and tropical fruits.
It is also important to highlight that we are the second biggest producer of beef in the world.
The leading role Oil & Gas plays in the Brazilian Economy
Even though the country has such a diverse economy as we have just seen, it is intriguing to observe that natural gas and oil still have such a determining role in this scenario.
As for oil, it is a high added value commodity, and, precisely because of that, it is the reason for many conflicts around the world. Nationally speaking, it is fundamental for many industrial segments, such as petrochemistry.
Its importance is also seen in its use as an energy source—oil is responsible for 31,1% of the national energy mix. And natural gas comes right after it, as the second most used energy source in Brazil: 23% of the total.
Still regarding oil, it is also the pillar of gasoline and diesel production, fuels that are widely used in automobiles.
And oil exploration reverberates around the areas where it occurs, due to the payment of royalties from the Union to cities and states. This revenue is later on invested in areas such as education and health. In fact, this financial compensation is the same with natural gas extraction in Brazil.
It is also worth mentioning that there is a study conducted by EY in partnership with the Brazilian Institute of Oil, Gas, and Biofuels (IBP) that reminds us that, beyond the large gas and oil reserves, these markets have another great contribution to the economy: tax collection. In the industry sector, gas and oil are the ones that collect most federal taxes, also owing to the good salaries paid to professionals in the segment.
Brazil’s rising market
It is also important to note that since the pre-salt layer was discovered, Brazilian natural reserves have made a great leap forward. Proof of that can be found in data by the ANP, which highlighted that in 2021 the Tupi field, in the pre-salt layer of the Santos basin, was the biggest oil and natural gas producer of the country.
The same data also reminds us that the Petrobras 70 platform, in the Búzios field, was the installation with the highest oil production, and the platform ship FPSO City of Itaguaí, in the Tupi field, was the one with the highest natural gas production.
The need for a new energy matrix
As aforementioned, the Brazilian energy mix is mostly non-renewable. Despite being considered one of the most renewable matrixes in the world, it still uses a great amount of fossil fuel.
Given that, although being crucial for our economy (and the global economy as a whole), it is important to be attentive to the importance of changing this dependence on oil and natural gas, thinking in sustainable terms.
Energy transition is a commitment made by countries and organizations to change the structure of their energy mix, a commitment to which Brazil has been devoted.
Attentive to global needs and to the climate changes that affect human life so much, this change has become a cause in which Proper Marine is also deeply engaged, even though we can’t help foreseeing that the fossil fuel market will keep growing in the years to come.
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