Brazilian President Says He Wants His Country to Join OPEC
Brazilian President, Jair Bolsonaro, said that he wants his country to join OPEC. This is a move that would add the essential new producer to the oil cartel for years.
The comments came ahead of a big auction of oil rights in Brazil, which is increasing output rapidly. Also, OPEC membership would likely need Brazil to limit oil production. It will probably throw future extension plans into uncertainty.
Saudi Arabia and thirteen other countries in the Organization of the Petroleum Exporting Countries groups are included in the top exporting countries. Since 2017, OPEC had an agreement with several non-member producers, excluding Brazil, to restrict supply to boost prices.
Bolsonaro said that he would very much like Brazil to become a member of OPEC. He recently has an investment conference in Riyadh, speaking with a translator.
Brazil would be the most important producer to join OPEC, as it has been exporting for years. Also, the country’s current production makes it OPEC’s third-largest producer. It is far above that of recent new members like Congo and Equatorial Guinea.
The Brazilian president said he would need to seek his economy and energy ministers to make sure they could follow the decision.
Moreover, he added that Brazil had more substantial oil reserves than some OPEC members. Also, when the country was among the top six producers in the world, that would help steady the global market.
OPEC members said membership walks with Brazil were going on though it made no formal request to join the group.
Brazilian Oil Output
Oil output has been increasing rapidly in Brazil from offshore fields. Also, production rose by 220,000 barrels per day (BPD) in August to a record of 3.1 million BPD, according to the International Energy Agency.
That would make Brazil the third-largest OPEC producer after Saudi Arabia and Iraq. It pumps the equivalent of more than 10% of current OPEC output.
Brazilian authorities approved fourteen firms to participate in the oil bidding round next month. Also, the total signing bonuses assumed to be the biggest, exceeding $25 billion, according to national oil regulator ANP.
The so-called transfer-of-rights auction is scheduled for Nov. 6th and concerns a zone of Brazil’s southeastern coast. Oil firms participating include global oil majors as well as state-run Petroleo Brasileiro SA, or Petrobras.
Brazil is a more significant producer than the several others that left and joined the group in recent years. Nigeria, which pumps almost 2 million barrels per day, is the biggest producer to join Vienna-based OPEC. Also, it remains a member since 1971.
Ecuador plans to leave OPEC in 2020. Besides, Qatar quit this year. Equatorial Guinea joined in 2017, and Congo became a member last year.
Moreover, oil that has been found floating on beaches in Brazil’s northeast is probably a leak from a ship. On Wednesday, the commander in the Brazilian navy said it might be an accident.
Ilques Barbosa Jr. said he was confident Brazil would get to the rear end of who was responsible for the spill. The oil spill hit more than 100 beaches in Brazil.
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