Brazil continues to steal the spotlight

Brazil is rich with oil -- there's no doubt about that.


Exploration and production in the country has mounted in the last decade as multiple companies have begun drilling the pre-salt fields offshore Brazil. It seems that every week is highlighted with a new discovery, billion-dollar award or production start-up in Brazil.

The EIA reports that "recent discoveries of large offshore, pre-salt oil deposits could transform Brazil into one of the largest oil producers in the world." Additionally, Oil and Gas Journal reports that Brazil boasts 12.9 billion barrels of proven oil reserves in 2011, the second largest in South America behind Venezuela; and production in the country is steadily rising.

Supporting this trend, the deepwater drilling moratorium in the US Gulf of Mexico has helped to disperse drilling rigs to other locations. Currently, Brazilian waters host a large share of the ultra-deepwater drilling rig fleet with some rigs working offshore West Africa and in Asia, as well.

Additionally, Petrobras has ordered the first seven of 28 planned deepwater drilling rigs from Brazilian shipyard Estaleiro Atlantic Sul (EAS) for $4.64 billion.

Unlike the US Gulf of Mexico, North Sea, West Africa and Asia Pacific, the majority of activity offshore Brazil is supported by Brazilian companies. That's not to say that majors, independents and NOCs aren't active as well, but Brazilian firms seem to certainly be enjoying the home field advantage.

Based largely on its pre-salt discoveries and developments, Brazilian producer Petrobras (NYSE:PBR) has climbed to the number four position in Platt's ranking of the 250 biggest global energy companies, to be listed only behind ExxonMobil, BP and Gazprom -- and ahead of many super-majors, NOCs and independents worldwide.

From the Campos Basin to the Santos Basin, shallow water to ultra-deepwaters, offshore Brazil is a hot spot for oil and gas activity, with not only Petrobras racking up millions of barrels in reserves.

Brazil's largest independent producer OGX has made myriad shallow-water discoveries and is bringing some of its first fields into production. The company's successes have mounted so high that rumors have surfaced of international firms offering billions for OGX.

Additionally, numerous international firms have earned interest in various blocks and projects, and are even operating some major offshore developments in Brazil.

For instance, Norwegian player Statoil (NYSE:STO) has just started up its 100,000-barrel-a-day Peregrino development and made a major oil discovery with Peregrino South in the same week.

International firms are also eager to participate in the next offshore licensing round in Brazil.

Look to the South American country for billions in exploratory and development projects, as firms continue to set their sights on Brazil.

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Phaedra Friend Troy is the content director for PennEnergy.com, an all-energy website that provides oil and gas, power and infrastructure news, analysis, reports and more. Sign up for a free daily enewsletter today.