Brazilian Oil & Gas Sector Fuels Investment from Middle East
Gulf Region Accounts for Almost 20 Percent of Petroleum Imports to Brazil Petroleum Exports from Middle East to Brazil Reach US$2.76 Billion in Q1 of 2013 Rio de Janeiro: 17 July, 2013 – GrupoBraz Consulting in association with BrazArtis, an import-export company based in Rio de Janeiro, today announced a campaign aimed at expansion of commerce with specialized product and services providers in the Oil & Gas sector from the Middle East. This endeavor is fueled by the recent discoveries of Oil & Gas in Brasil and growing imports from the Gulf Region.
Brazil imported about $2.76 billion worth of petroleum products, gas and energy from the Middle East from January to April of 2013 which accounted for almost 20% of total oil imports to the country, According to the Arab-Brazilian Chamber of Commerce (ABCC). In addition to the growing imports of products to the country, foreign specialized labor force has experienced a significant increase. Over the past 3 years, more than 50,000 specialized foreigners were employed in the Oil & Gas industry in Brazil, which represented 25% of all temporary and permanent work permits issued.
Jan Dabrowa, Commercial Director of BrazArtis – GrupoBraz Consulting, said: “Due to the growing demands in the Oil & Gas sector, the much needed resources and services have to be acquired abroad. With this in mind, the Middle East is one of the leading trading partners with Brazil, being a major supplier of Oil and Gas products and at the same time, consumer of Brazilian agricultural products.” “While imports are on the rise in Brazil, it is important to note that imported products and services are controlled by strict fiscal and import legislation. On average, imported services are taxed at around 50% with six taxes being levied. This includes taxes over services, revenue and income as well as social contribution, financial operations and remittance of capital. Although Brazil offers great business opportunities, they require an understanding and attentiveness to the ever-changing and complex tax and legal regulations.” As a whole, a notable increase has been noted in imports to Brazil of derivatives, in addition to steady imports of crude oil, naphtha, jet fuel, liquefied natural gas (LNG) and diesel oil, which continue to dominate the imports from the Middle East.
“Due to the current market dynamics and focus on expansion of local industries, adjustments have been implemented recently in the taxation of some products and services in Brazil. This included adjustments of 193 machines and industrial equipments. These changes are meant to benefit various sectors including Oil & Gas, mining, telecommunications, agriculture as well as the service sector.” - added Dabrowa.
The move to expand the exploration of the onshore and offshore basins in Brazil has been validated by the latest bids for exploratory concessions. At an event which took place in May of 2013, 142 blocks have been acquired by both national and international companies. This is equivalent to an area of 100,372.31 km² and totaled U$6.9 billion relating to minimum commitments for investments in exploration activities. As a result, Brazil experienced an influx of new foreign suppliers of products and services.
In Q1 of 2013, Saudi Arabia was the larger supplier of oil to Brazil, where Algeria contributed to U$867.75 million, Kuwait U$508 million, the United Arab Emirates U$130 million, Iraq U$104 million, Libya U$78 million, Qatar U$36 million and Bahrain U$660,000, according to ABCC.
- Salutation to the sun: Saudi solar investment to provide third of country's energy
- Burning the candle at both ends: Iraq's pressing energy crisis
- Are you in the know? The details on Egypt's energy restructuring plan
- Nuclear energy in the Middle East: a renewable menace?
- Will passing gas ease Israel's tensions with Egypt and Turkey?