Brazilian oil and gas industry expects up to 50,000 new jobs could be created next year

RIO DE JANEIRO, BRAZIL – The Brazilian oil and gas industry projects that the sector could create up to 50,000 new jobs by 2022, driven by the recovery of barrel prices and the sale of Petrobras assets, as Petrobras will use these sales to finance investments in the upstream sector.

The estimate comes from the Brazilian Institute of Petroleum and Natural Gas (IBP), an entity that brings together the leading companies in the industry. IBP President Eberaldo Almeida said oil production will almost double by 2030.

“Brazilian oil production has increased 140% since two decades ago. That’s almost 3 million barrels per day. We, as an institute, forecast that this production will reach 5.4 million barrels per day by 2030.

To achieve this, we need to increase investment significantly. From 2020 to 2024, we expect to spend US$50 billion. With investment comes jobs,” Almeida said.

THOUSANDS OF NEW JOBS IN THE UPSTREAM SECTOR

IBP projects that the number of jobs in the upstream sector could increase from about 330,000 today to about 610,000 by 2025. It estimates that this pathway could create between 30 and 50,000 new jobs in the industry in 2022 alone.

For Almeida, some of the factors explaining future growth are Petrobras’ portfolio decisions, the release of projects for smaller companies both onshore and in shallow waters, and the reduction of royalties in mature fields to attract investment.

For the IBP president, these factors have already led to relevant changes in states such as Rio Grande do Norte and Bahia.

The destruction of jobs partly explains the expected upswing in upstream job creation during the pandemic. Based on official employment data, a study by the company LCA Consultores shows that the sector has a negative employment balance in the thirteen months from March 2020 to April 2021.

PETROBRAS STRATEGIC PLAN.

Growth in domestic oil production will depend mainly on Petrobras’ investment in exploration and production. In November, the majority state-owned oil company approved a strategic plan that calls for a significant increase in upstream capital spending and confirms the divestment of downstream and other assets.

Petrobras plans to invest US$68 billion by 2026, with 84% of CAPEX earmarked for exploration and production. The 2022-2026 strategic plan calls for a 22% increase in the company’s capital spending compared with the 2021-2025 plan. Higher international oil prices will support the increase in capital expenditures.

Funds for these investments will come in part from the divestment of assets, mainly onshore and shallow-water fields, international assets, refineries, onshore pipelines, a remaining stake in Gaspetro, the petrochemicals company Braskem, oil-fired thermal power plants, and fertilizer production units. Petrobras expects to raise between US$15 billion and US$25 billion from these sales.

UPSTREAM SECTOR

The upstream sector includes searching for potential underground or underwater crude oil and natural gas fields, drilling exploratory wells, and subsequently drilling and operating the wells that recover and bring the crude oil or raw natural gas to the surface.

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