Economy & Energy
Year IX -No 51:
August-September 2005   
ISSN 1518-2932

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e&e No 51

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Natural Gas in Bolivia: Risks and Opportunities

Petroleum in Brazil

Carbon Balance: The Top-Down and Bottom-Up Emissions Accounting Methodologies


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Text for Discussion:

Petroleum in Brazil

  Omar Campos Ferreira.

 The nº 46 issue of this periodical published an article about the world petroleum reserves (“Back to Petroleum” nº 46, Oct/Nov 2004) showing that the accumulated reserve/accumulated consumption ratio was approaching its limit and that it would reach 1.5 in 2020. The theme has strategic importance since the persistent international oil price rise caused reactions in the financial markets and governmental plans. It was hoped that at the end of winter in the northern hemisphere prices would go back to the previous level but only oscillations occurred and no lowering trends could be identified. In the present article we try to evaluate the Brazilian oil reserves and the capacity to be self-sufficient during the time necessary to calmly change to new energy technologies.

Oil Reserves

The Brazilian “conventional”[1] oil reserves are evaluated using the same method used in the mentioned article. The data series is considerable shorter that that used in the mentioned article what brings incertitude regarding the calculations. Data from the 2002 National Energy Balance are shown in their raw form in Graphic 1. The accounting used in the Balance subtracts from the reserves the production of the year; in order to get the original reserve, which can be projected using the logistic method, it is necessary to make corrections. Furthermore, the criterion to be used to distinguish resources from reserves was changed in 1990 which required another correction already applied to the data in the graphic. 

Graphic 1- Production and Reserve Data

As usually, reserve data were grouped in tri-annual centroids and the average tri-annual rate of discoveries (reserve variation) was represented as a function of the accumulated discoveries and one can see two pulses shown in graphics 2, 3 and 4.

Graphic 2.- Oil discoveries pulses

Graphic 3 – Treatment of the first pulse

The first pulse would be the maximum discovery of 1,880 Mm3 (12 billion barrels); the second one, without the influence of the first, would reach 4,210 Mm3 (26.5 billion barrels). In order to test the calculations, the historical series was rebuilt as it can be seen in graphic 4. According to these results, the remaining reserve (original reserve – accumulated consumption until 2001) would be 3,210 Mm3 or 20 billions barrels.

Graphic 4 – Interference of the first pulse on the second one 


Graphic 5 – Re-composition of the historical series

It ca be concluded that the original oil reserve is 4,210 Mm3 of which 1,000 Mm3 have been consumed. In order to evaluate how long the reserve will last in case self-sufficiency is attained it is necessary to project consumption based on projection of the economical growth. The tested relationships (consumption versus GDP, GDP/inhabitants, population and population-GDP) supplied correlation coefficients that were not satisfactory, possibly due to the diversity of factors that condition consumption (prices in the international market, economic activity, balance of payment, technology of engines, etc.). Therefore, the evaluation shown in Graphic 6, based on the consumption-GDP correlation is one of the various one that can be made and all of them are equivalent in what concerns agreement with data.

Graphic 6- Consumption Projection

In the nº 49 issue of the periodical Carlos Feu et al. presented the macroeconomic model developed by the e&e staff (“The Future of the Brazilian Electric System – Annex 2: Reference Macroeconomic Scenario”) which forecasts for 2025 a GDP of US$2003 1,950 billion  dollars in purchase power parity for the projected population of 229 million inhabitants. Using these data it is estimated that between 2003 and 2025 the accumulated consumption will be 2,630 Mm3 (daily average = 2,060 M barrels) and in this last year 580 Mm3 will remain.

As can be observed, the oil reserve is comfortable relative to that of other countries but it should be necessary to prepare the transition to new energy technologies. Making use of the well-succeeded experience of the Alcohol Program, it can be expected the control of vegetal oils technology to solve the problem of diesel engines fuel that conditions oil consumption (Graphic 7) in the available period (25 to 30 years). Furthermore, the high oil price and the carbon credit may stimulate the use of fuel cell in (individual, collective or load) transport, with electrolytic hydrogen and/or ethanol. Other possibilities would be to increase the diesel oil fraction in petroleum distillation, stimulation of railway, waterway and coastal traffic and other possibilities.

Graphic 7- Projection of Petroleum and Diesel Oil




[1] Conventional oil is that which can be extracted and processed at costs competitive with other primary sources.


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Tuesday, 11 November 2008

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