Here is why the worldâs smart money is being invested in Brazil.
- Thread starter SouthAmerica
- Start date
I am not SA. I have some disagreements with him and have posted them. For example he thinks it wise for Brazil to have built it reserves up from about 50 billion to 200 billion*, but I do not as they issued local bonds in Real (now paying about 12% to "sterilize" the Real that they paid out to buy the dollars that Brazil then invested at 6% in US treasuries. Stupidly Brazil has yet to make its "sovern wealth" fund. So not only are they taking a 6% interest bath, they are investing something that will pay back face value only in dollars of rapidly sinking value. IHMO SA is nuts to support this.Quote from Cesko:
Do you really expect this deranged individual (SA aka Billdick) to tell you the truth? After all, he is a guy who expects people to believe him he emigrated from Brazil because of the traffic.
If you want further proof go to www.sciforums.com where I am much more active there as Billy T. I am a retired Ph. D . physicists who happens to be interested in economics and lives now in Sao Paulo. OR go to the web page of my book Dark Visitor at www.DarkVisitor.com ( I think it is still up - friend put it up some years ago and I have not been there for years.)
Just because I, SA and now the Economist all agree times are good, or at least much better than they were, for Brazil does not mean we three are all the same person. - Only one not well versed in what I have posted in conflict with SA (or one prone to stupidly jump to unfounded conclusions) would think as you do that we are the same.
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*Initially SA even bought the offical line that the object of this was to protect Brazil against "external turbulence" - it never was. The truth has always been that there is a flood of dollars coming to Brazil (Some times called the Dutch disease) and it has made many high labor content exports impossible, factories have closed (called "de-industralization" at least in my local paper) and that gets politicians upset - they are never very big on "creative destruction" as the voters are not.
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June 6, 2008
SouthAmerica: Here is some good news and some bad news about development costs regarding Petrobras new oil fields in Brazil.
First the bad news it will cost an estimated $240 billion US dollars to develop the new oil fields â The good news is that over that same period of years that amount it will translate to about $ 24 billion reais (the Brazilian currency.)
The reality is: the costs could reach $ 500 billion US dollars or even higher when the costs estimates are done in confetti.
*****
âBrazil's Petrobras: Price Tag For Two New Refineries Is $20 Billionâ
By: Rogerio Jelmayer
Dow Jones Newswires - June 05, 2008
SAO PAULO -(Dow Jones)- The price tag for two new oil refineries planned by Brazilian state-run energy giant Petroleo Brasileiro SA (PBR), or Petrobras, is $20 billion, Petrobras President Jose Sergio Gabrielli said Thursday.
The construction of the refineries will be completed by 2015, according to Gabrielli, who was speaking before a government committee on infrastructure development.
One of the refineries is likely to be located in northeastern Brazil, although an exact location hasn't yet been picked. That refinery is expected to produce 600,000 barrels a day of premium oil products, such as gasoline and diesel fuel, for export. Details on the second refinery haven't yet been released by Petrobras.
Petrobras plans to boost its refining capacity to 3.6 million barrels a day by 2015 from current capacity of 1.9 million barrels a day.
As of 1750 GMT, Petrobras' common shares were up 2.8% at 55 reals ($33.65), while the company's preferred shares were up 2.72% at BRL46.50.
Source: http://money.cnn.com/news/newsfeeds/articles/djhighlights/200806051427DOWJONESDJONLINE000796.htm
******
âBrazilian Oil Finds May Cost $240 Billion to Developâ
By Joe Carroll
Bloomberg News â June 5, 2008
June 5 (Bloomberg) -- Brazil's oil discoveries, including the Western Hemisphere's largest in three decades, may cost $100 billion more to develop than the industry's most costly field.
The Tupi deposit and nearby offshore prospects probably will cost $240 billion to exploit, said Peter Wells, director of U.K. research firm Neftex Petroleum Consultants Ltd. and a former Royal Dutch Shell Plc exploration manager.
The total exceeds the $136 billion estimate for Kazakhstan's Kashagan field, led by Eni SpA, and would be enough to fund the U.S. space program for 14 years.
Brazil's state-controlled Petroleo Brasileiro SA will need to enlist international producers such as Exxon Mobil Corp. to raise financing for the platforms and pipelines required to reach crude trapped beneath six miles (10 kilometers) of water and rock, Wells said in a telephone interview. The prospects may hold $6 trillion of petroleum and make Brazil one of the world's 10 largest oil producers.
``This oil is going to be difficult to get out of the ground and it will cost a lot,'' said Wells, who also was a chief negotiator for BP Plc in Azerbaijan. Petroleo Brasileiro ``will need the capital expertise only found with the world's largest, most experienced oil companies.''
Tupi, the biggest discovery in the Americas since 1976, will start pumping in April 2009, Chief Executive Officer Jose Sergio Gabrielli said in an interview last month. Gabrielli declined to estimate development costs for Tupi and adjacent fields, and a spokesman said yesterday that the company wouldn't comment on Wells's projection.
Tupi and Friends
The $240 billion estimate assumes there are four to seven similar prospects nearby and includes costs to drill wells, lay pipelines and build production platforms over a period of about 20 years, Wells said.
Tupi alone could cost $100 billion, said Wells, part of a Neftex team doing a six-year study to map all of the world's petroleum basins.
Cambridge Energy Research Associates, the Cambridge, Massachusetts-based consulting firm headed by Daniel Yergin, said the Tupi-area fields will cost $200 billion to $240 billion. Costs are rising as producers compete for labor and equipment with oil prices above $120 a barrel. Deepwater drilling rigs are renting for more than $600,000 a day in some cases.
The Brazil fields may hold as much as 50 billion barrels of crude, Wells said. That's more than the reserves of Libya.
Petrobras preferred shares rose 0.8 percent to 45.62 reais in Sao Paulo trading. The stock has gained 30 percent since Nov. 8, when the company announced the size of the Tupi find. Exxon Mobil Corp.'s shares were little changed in the same period.
Petrobras's market cap of about $269 billion makes it the world's seventh-largest company by market value, according to data compiled by Bloomberg.
Rigs Ordered
Petrobras, as Rio de Janeiro-based Petroleo Brasileiro is known, already has leased about 80 percent of the world's deepest-drilling offshore rigs and plans to hire 14,000 engineers, geologists and drillers within the next three years, Gabrielli said.
The company announced plans last month to place orders with shipbuilders for 40 new drilling rigs and production platforms that will cost about $30 billion.
``Petrobras will probably face stiff challenges in this endeavor, as there are significant hurdles to overcome in terms of acquiring basic materials, people and rig equipment,'' said Stephen Ellis, an analyst at Morningstar Inc. in Chicago.
Petrobras will revise its $22.5 billion-a-year capital budget because it was drafted before engineers realized the size of Tupi's recoverable reserves, which may be equivalent to 8 billion barrels of oil, Gabrielli said. At $240 billion, the price tag would be more than the annual economic output of Thailand, Ireland and Malaysia.
20% Gas
The Brazilian discoveries contain about twice as much natural gas in each barrel of crude as reservoirs in the Gulf of Mexico and West Africa, increasing the complexity and expense of the projects, Wells said.
Tupi is about 80 percent crude and 20 percent gas, said Wells, a University of Exeter-trained geologist. For each barrel of oil, there's 700 to 1,000 cubic feet of gas.
``Gas is an important cost consideration because they have to decide whether to reinject it back into the reservoir or construct a rather large pipeline to take it to another destination where it can be used,'' said Candida Scott, a senior director at Cambridge Energy Research Associates.
The high wax content of Tupi's crude and the presence of carbon dioxide, which can damage pipes, also may raise costs, Wells said.
BG Group
Reading, U.K.-based BG Group Plc, which owns 25 percent stakes in Tupi and an offshore field known as Parati, and 30 percent of Carioca, hasn't provided cost projections. Carioca, which neighbors Tupi, may hold 33 billion barrels of crude, a Brazilian oil regulator said in April.
``It's really simply too early to make an estimate of costs,'' BG spokeswoman Jo Thethi said.
Irving, Texas-based Exxon Mobil plans to begin drilling its first exploratory well off Brazil's coast in the third quarter.
``It's a very large area, very difficult to image and it's going to cost a lot of money to develop,'' Chief Executive Officer Rex Tillerson told reporters after the company's May 28 shareholders meeting in Dallas.
Source: http://www.bloomberg.com/apps/news?pid=20601109&sid=a8V0f9Nf5R.s&refer=home
.
June 6, 2008
SouthAmerica: Here is some good news and some bad news about development costs regarding Petrobras new oil fields in Brazil.
First the bad news it will cost an estimated $240 billion US dollars to develop the new oil fields â The good news is that over that same period of years that amount it will translate to about $ 24 billion reais (the Brazilian currency.)
The reality is: the costs could reach $ 500 billion US dollars or even higher when the costs estimates are done in confetti.
*****
âBrazil's Petrobras: Price Tag For Two New Refineries Is $20 Billionâ
By: Rogerio Jelmayer
Dow Jones Newswires - June 05, 2008
SAO PAULO -(Dow Jones)- The price tag for two new oil refineries planned by Brazilian state-run energy giant Petroleo Brasileiro SA (PBR), or Petrobras, is $20 billion, Petrobras President Jose Sergio Gabrielli said Thursday.
The construction of the refineries will be completed by 2015, according to Gabrielli, who was speaking before a government committee on infrastructure development.
One of the refineries is likely to be located in northeastern Brazil, although an exact location hasn't yet been picked. That refinery is expected to produce 600,000 barrels a day of premium oil products, such as gasoline and diesel fuel, for export. Details on the second refinery haven't yet been released by Petrobras.
Petrobras plans to boost its refining capacity to 3.6 million barrels a day by 2015 from current capacity of 1.9 million barrels a day.
As of 1750 GMT, Petrobras' common shares were up 2.8% at 55 reals ($33.65), while the company's preferred shares were up 2.72% at BRL46.50.
Source: http://money.cnn.com/news/newsfeeds/articles/djhighlights/200806051427DOWJONESDJONLINE000796.htm
******
âBrazilian Oil Finds May Cost $240 Billion to Developâ
By Joe Carroll
Bloomberg News â June 5, 2008
June 5 (Bloomberg) -- Brazil's oil discoveries, including the Western Hemisphere's largest in three decades, may cost $100 billion more to develop than the industry's most costly field.
The Tupi deposit and nearby offshore prospects probably will cost $240 billion to exploit, said Peter Wells, director of U.K. research firm Neftex Petroleum Consultants Ltd. and a former Royal Dutch Shell Plc exploration manager.
The total exceeds the $136 billion estimate for Kazakhstan's Kashagan field, led by Eni SpA, and would be enough to fund the U.S. space program for 14 years.
Brazil's state-controlled Petroleo Brasileiro SA will need to enlist international producers such as Exxon Mobil Corp. to raise financing for the platforms and pipelines required to reach crude trapped beneath six miles (10 kilometers) of water and rock, Wells said in a telephone interview. The prospects may hold $6 trillion of petroleum and make Brazil one of the world's 10 largest oil producers.
``This oil is going to be difficult to get out of the ground and it will cost a lot,'' said Wells, who also was a chief negotiator for BP Plc in Azerbaijan. Petroleo Brasileiro ``will need the capital expertise only found with the world's largest, most experienced oil companies.''
Tupi, the biggest discovery in the Americas since 1976, will start pumping in April 2009, Chief Executive Officer Jose Sergio Gabrielli said in an interview last month. Gabrielli declined to estimate development costs for Tupi and adjacent fields, and a spokesman said yesterday that the company wouldn't comment on Wells's projection.
Tupi and Friends
The $240 billion estimate assumes there are four to seven similar prospects nearby and includes costs to drill wells, lay pipelines and build production platforms over a period of about 20 years, Wells said.
Tupi alone could cost $100 billion, said Wells, part of a Neftex team doing a six-year study to map all of the world's petroleum basins.
Cambridge Energy Research Associates, the Cambridge, Massachusetts-based consulting firm headed by Daniel Yergin, said the Tupi-area fields will cost $200 billion to $240 billion. Costs are rising as producers compete for labor and equipment with oil prices above $120 a barrel. Deepwater drilling rigs are renting for more than $600,000 a day in some cases.
The Brazil fields may hold as much as 50 billion barrels of crude, Wells said. That's more than the reserves of Libya.
Petrobras preferred shares rose 0.8 percent to 45.62 reais in Sao Paulo trading. The stock has gained 30 percent since Nov. 8, when the company announced the size of the Tupi find. Exxon Mobil Corp.'s shares were little changed in the same period.
Petrobras's market cap of about $269 billion makes it the world's seventh-largest company by market value, according to data compiled by Bloomberg.
Rigs Ordered
Petrobras, as Rio de Janeiro-based Petroleo Brasileiro is known, already has leased about 80 percent of the world's deepest-drilling offshore rigs and plans to hire 14,000 engineers, geologists and drillers within the next three years, Gabrielli said.
The company announced plans last month to place orders with shipbuilders for 40 new drilling rigs and production platforms that will cost about $30 billion.
``Petrobras will probably face stiff challenges in this endeavor, as there are significant hurdles to overcome in terms of acquiring basic materials, people and rig equipment,'' said Stephen Ellis, an analyst at Morningstar Inc. in Chicago.
Petrobras will revise its $22.5 billion-a-year capital budget because it was drafted before engineers realized the size of Tupi's recoverable reserves, which may be equivalent to 8 billion barrels of oil, Gabrielli said. At $240 billion, the price tag would be more than the annual economic output of Thailand, Ireland and Malaysia.
20% Gas
The Brazilian discoveries contain about twice as much natural gas in each barrel of crude as reservoirs in the Gulf of Mexico and West Africa, increasing the complexity and expense of the projects, Wells said.
Tupi is about 80 percent crude and 20 percent gas, said Wells, a University of Exeter-trained geologist. For each barrel of oil, there's 700 to 1,000 cubic feet of gas.
``Gas is an important cost consideration because they have to decide whether to reinject it back into the reservoir or construct a rather large pipeline to take it to another destination where it can be used,'' said Candida Scott, a senior director at Cambridge Energy Research Associates.
The high wax content of Tupi's crude and the presence of carbon dioxide, which can damage pipes, also may raise costs, Wells said.
BG Group
Reading, U.K.-based BG Group Plc, which owns 25 percent stakes in Tupi and an offshore field known as Parati, and 30 percent of Carioca, hasn't provided cost projections. Carioca, which neighbors Tupi, may hold 33 billion barrels of crude, a Brazilian oil regulator said in April.
``It's really simply too early to make an estimate of costs,'' BG spokeswoman Jo Thethi said.
Irving, Texas-based Exxon Mobil plans to begin drilling its first exploratory well off Brazil's coast in the third quarter.
``It's a very large area, very difficult to image and it's going to cost a lot of money to develop,'' Chief Executive Officer Rex Tillerson told reporters after the company's May 28 shareholders meeting in Dallas.
Source: http://www.bloomberg.com/apps/news?pid=20601109&sid=a8V0f9Nf5R.s&refer=home
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Your previous post was great: full of good info. Thx.
Funny - confetti is a good description for the value of your commentaries.
You basically only demonstrate your mastery of Cut and Paste stories off the newswire, that we have already read anyway.
Almost everything you "add" actually subtracts from these stories.
Did your parents have any childrens who were NOT braindead at birth?
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June 7, 2008
SouthAmerica: Reply to Trader Zones
I checked many of your postings since you started posting on this forum, then I realized that you are a complete MORON.
Sorry but I don't have time to waste with idiots like yourself.
I guess many people on this forum might feel the same about you if they have been reading most of your postings.
You should find a skin head website to post your stuff since your intellectual level are more in line with that kind of people.
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June 7, 2008
SouthAmerica: Reply to Trader Zones
I checked many of your postings since you started posting on this forum, then I realized that you are a complete MORON.
Sorry but I don't have time to waste with idiots like yourself.
I guess many people on this forum might feel the same about you if they have been reading most of your postings.
You should find a skin head website to post your stuff since your intellectual level are more in line with that kind of people.
.
"Waste" is a good description of your threads. Yay Brazil, Boo USA. That is basically the abridged version.
Keep posting. I don't agree with some of what you say but appreciate the effort and info. Most of the posts on et have no informational content whatsover - I appreciate the fact that you're trying to keep us informed and don't mind your enthusiasm for your homeland...
Besides, it's kind of a nice break from the jaded cynicism that permeates the commentary of most American posters...
What's interesting is that I think the Tupi and other Brazilian discoveries have put the pressure on the Saudis. They are now putting in major refining installations to get some of their uglier oil converted to more usable products. It all won't be ready for about five years, but I think they realize they're in a race to market with your homeland:
http://www.marketwatch.com/news/sto...-4CCF-467C-AEE1-4D15A93E5F03}&dist=TNMostRead
Saudi Arabia plans royal treatment for heavy crude
Kingdom to raise refining output, but plans may do little to ease high prices
By Moming Zhou, MarketWatch
Last update: 6:38 p.m. EDT June 6, 2008Comments: 89SAN FRANCISCO (MarketWatch) -- Dense, dirty and less profitable, a type of crude oil long marginalized by the global petroleum industry is attracting a wave of new refining investment as the world's supplies of premium crude look set to decline.
Saudi Arabia, through its state-owned oil company Saudi Aramco, is planning to expand its refinery capacity by nearly 80% in five years, in part by signing deals with foreign oil majors including ConocoPhillips, Total SA, ExxonMobil Corp. and China's Sinopec
Much of that new capacity will be aimed at turning the kingdom's reserves of heavy crude oil, which is less desirable and is sold at discount to premium light crude, into gasoline and other petroleum products for shipment to Europe and Asia.
"Indeed we are building more refineries that will refine Saudi crude; much of this will be heavy sour crude," said Sheema Al-Nafisee, a spokesman at Saudi Aramco, the world's largest oil producer. "We can say that we will continue to satisfy both domestic and world demand."
The kingdom's plans to increase its refining capacity won't necessarily alleviate high oil and gasoline prices. It will take years before new refineries start operating. World oil demand growth, including rising consumption in Saudi Arabia itself, could easily outstrip additional capacity, analysts say.
"The refineries [in Saudi Arabia] won't be ready in five years, and we are expecting delays on all fronts," said A.F. Alhajji, an energy economist at Ohio Northern University and a long-time observer of Saudi Arabia. Demand is too lofty to be accommodated by the planned increase in capacity, he said.
"I believe oil prices in the next two to three years will stay high," he said.
On Friday, futures for the benchmark light, crude contract surged by nearly $11, or more than 8%, to close at $138.54 a barrel on the New York Mercantile Exchange. Talk about a potential Israeli attack on Iran combined with a slide in the U.S. dollar pushed oil to a new record above $139 in electronic trading. Read Friday's Futures Movers.
'Sequence of investment'
Saudi Arabia's move to expand its refining output of heavy crude comes as major oil-producing countries prepare for a future that may yield less of the more-profitable, light crude oil.
Some of the world's biggest oil fields, including Saudi Arabia's Ghawar, Europe's North Sea, and Mexico's Cantarell, are producing less of the premium oil.
To be sure, the world still has plenty of light crude to meet global demand for at least a few decades. But the long-term outlook for light crude, combined with oil prices over $135 a barrel, has encouraged some countries to bump up their investment in producing heavy grades of crude.
Saudi Arabia expects to increase its oil production to 12 million barrels a day in 2009 from today's 10.5 million. Some of the growth, including the 900,000 barrels a day in the Manifa field, the fifth-largest in the world, will be in heavy grades.
"This is just the sequence of investment. You go for more profitable oil first, and then if you have money, you invest in the less profitable," Alhajji said.
Canada, where 95% of reserves are in the form of oil sands, has seen a rush of investment into producing and processing the super-dense output from these sands.
About 40% of the world oil resources are heavy or extra-heavy crude, according to Schlumberger Ltd. ( , the world's largest oilfield services company, and another 30% are made up of oil sands and bitumen, which are even more difficult to refine.
In Saudi Arabia, about one third of its 260 billion barrel reserves, the world's largest, are heavy crude, according to U.S. Energy Information Administration.
Refinery shortage
As the world is trying to churn out more heavy crude, the existing refinery system is proving to be a bottleneck.
so instead, we get jaded cynicism that permeates the poster of a Brazilian (now apparently living out of his country) poster child