Brazil’s Petrobras Strikes Oil in New Pre-Salt Well
Brazilian state oil company Petrobras said Wednesday it has identified the presence of hydrocarbons in the pioneer well of block C-M657, located in the pre-salt area of the Campos Basin. Petrobras is the operator of the block and holds a 30 percent stake, in partnership with ExxonMobil, which has 40 percent, and Norway’s Equinor with 30 percent. Well 1-BRSA-1376D-RJS (Naru) is located about 300 kilometers from the city of Rio de Janeiro, in water depth of nearly 3,000 meters, the company said. Petrobras’ second-quarter commercial oil output grew 4.1 percent, year over year, to almost 2.5 million barrels daily, Oilprice.com reported this month. That growth was driven primarily by the significant expansion of the company’s presence in the pre-salt fields, where production expanded almost 31 percent in the same period, to 1.5 million barrels daily.
U.S. Firm Fined for Bribing National Oil Companies
A U.S.-based asphalt company has agreed to pay $16.6 million in fines after pleading guilty to bribery charges stemming from its business with state-run oil companies in three South American countries, the U.S. Justice Department said Tuesday in a statement. Between 2010 and 2018, Sargeant Marine paid millions of dollars in bribes to officials in Brazil, Venezuela, and Ecuador in order to obtain contracts or sell asphalt to state-owned or state-controlled companies in those countries, the company has admitted. Sargeant Marine, which is based in Florida, acknowledged that bribed officials at Brazil’s Petrobras, Venezuela’s PDVSA, and Ecuador’s Petroecuador, the Justice Department said. In related news, a former oil trader at Switzerland-based Vitol was charged Tuesday with paying $870,000 in bribes to former Ecuadorean officials from 2015 to 2020 in exchange for fuel oil contracts, the Associated Press reported. Vitol, which is not named in the indictment, purchased half of Sargeant Marine in 2015.
U.S., Brazil Agree to More Trade in Ethanol, Sugar.
Brazilian President Jair Bolsonaro announced Monday that the United States has agreed to expand how much sugar the South American country can export there, Folha de S.Paulo reported. In a message on social media, Bolsonaro said Brazil will be able to export 80,000 more metric tons of sugar to the United States under the plan. In exchange, Brazil will allow more U.S. ethanol into the country, said Bolsonaro, Reuters reported.
Bolsonaro Defends Environmental Record at U.N.
In his speech at the virtual meeting of the United Nations General Assembly, Brazilian President Jair Bolsonaro defended his government’s record on protecting the Amazon rain forest, the Associated Press reported. Brazil’s agricultural sector has increased exports in order to provide food to a growing world population, which has made it into a global target for criticism, said Bolsonaro. “We are victims of one of the most brutal disinformation campaigns about the Amazon and the Pantanal wetlands,” the Brazilian president said in his speech to the General Assembly. “The Brazilian Amazon is well known to be very rich. That explains why international institutions support such campaigns based on ulterior interests, joined by self-serving and unpatriotic Brazilian associations, with the objective of harming the government and Brazil itself.” Last week, several European countries, led by Germany, issued a statement known as the Amsterdam Declarations of Partnership. The statement says that deforestation in Brazil is making it “increasingly difficult” for Brazilian businesses and investors in the country to fulfill environmental, social and governance criteria, the AP reported. In recent months, European investment firms have reportedly threatened to divest from Brazilian assets including beef producers, grains traders, and government bonds if the country does not make progress in protecting the Amazon rain forest. “Divestment is a real option for managing risks arising from deforestation, but our hope is that the government will listen to our concerns and take action to reduce deforestation significantly,” Emine Isciel, head of climate and environment at Storebrand Asset Management in Norway, told the Advisor in a Q&A published July 14. In July, Bolsonaro banned the setting of agricultural and forest fires for 120 days, the AP reported. Deforestation may have reached a 14-year high in the 12 months through July, according to preliminary data that Brazil’s space agency published last month. Also on Tuesday, Brazil’s government said it disagrees with claims that a trade deal between the European Union and the Mercosur trade bloc would increase destruction in the Amazon, Reuters reported. Last week, France’s government cited a report for its opposition to the latest version of the E.U.-Mercosur trade deal. Brazil said the report, which it said the French government commissioned, “reveals the real protectionist concerns of those who commissioned it when dealing with the agricultural concessions made by the E.U. to Mercosur,” according to a joint note by Brazil’s Foreign Affairs Ministry and its Agriculture Ministry.
By Latin America Energy Advisor
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