The country’s large reserves, particularly pre-salt reserves, coupled with a rise in exploration and drilling activities, underscore the potential for significant production expansion.

Despite concerns over government intervention and taxation, foreign energy companies like TotalEnergies and Equinor continue to invest heavily in Brazil, signalling the country’s strong position in the global oil industry.

Data from Brazil’s hydrocarbon regulator, the National Agency of Petroleum, Natural Gas and Biofuels (ANP – Portuguese initials), shows that for April 2023, the country pumped an average of 3.1 million barrels of oil per day. That number is almost 1% higher than a month earlier and 5% greater year over year. Total hydrocarbon output for April 2023 amounted to just over 4 million barrels of oil equivalent per day which was 1.1% higher month over month and 4.4% greater than a year earlier.

That growth indicates Brazil possesses the potential to become the world’s largest oil producer, especially when it is anticipated the country 2023 will add 300,000 barrels per day, taking production to 3.4 million barrels daily by the end of the year.

During 2022, Brazil was ranked ninth globally by oil production, ahead of Kuwait and behind Iran, lifting an average of just over 3 million barrels per day. Suppose Latin America’s largest economy is to become the world’s fourth-largest oil producer.

Another key aspect that will support those plans is Brazil’s copious hydrocarbon reserves. According to the ANP, at the end of 2022, Latin America’s largest oil producer held proven or 1P petroleum reserves totaling 14.9 billion barrels, of which 77% were categorized as pre-salt. There are also 21.9 billion barrels of proven and possible or 2P reserves and 27 billion barrels of 3P reserves, known as proven possible and probable reserves. This illustrates that Brazil possesses considerable hydrocarbon potential and the reserves required to support a significant increase in oil production. Those reserves will keep growing as exploration and development drilling gains momentum, with the Baker Hughes International Rig Count showing 17 active rigs at the end of May 2023 compared to 11 a year earlier.

In January 2023, French supermajor TotalEnergies approved the $1 billion final investment decision, or FID, for Lapa South-west offshore oil project in the Santo Basin, Brazil.

In early May 2023, Norwegian energy supermajor Equinor announced that it, along with partners Repsol Sinopec and Petrobras had approved the FID to proceed with the $9 billion development of the B-M-C-33 project in offshore Brazil.

Brazil remains an attractive jurisdiction for foreign energy companies despite President Lula’s hiking oil industry taxes and the growing risk of increased government intervention.