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Archive for January, 2009

The global financial crisis is not expected to lead to a major economic downturn in Brazil, a new study has concluded. According to the Organisation for Economic Cooperation and Development (OECD), prospects for the South American country remain favourable in comparison with many other countries.

Indeed, the OECD’s composite leading indicators showed that the nation had experienced a decline of just 2.9 points in the last year. This compares with 7.6 points in the euro area and 8.7 points in the United States. The figures were based on various measures of economic activity, such as output in the industrial sector.

Meanwhile, the Brazilian central bank has polled 100 economists in an attempt to determine the likely rate of growth in 2009, Bloomberg reports. Respondents to the survey predicted on average that the economy would expand by two per cent this year.

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oil-on-water1By ANDREW DOWNIE, The New York Times
Published: January 24, 2009

SÃO PAULO, Brazil — Brazil’s state-controlled oil company, Petrobras, announced a crisis-busting investment plan Friday to spend more than $174 billion over the next five years, much of it for prodigious deep-water oil and gas exploration.

The investment covers the 2009-2013 period and represents a rise of 55 percent over the $112.4 billion the company had vowed to spend on development between 2008 and 2012.

This investment is “very robust and very important for the continuity of Petrobras’s growth,” José Sergio Gabrielli, the company’s chief executive, told reporters Friday at a news conference in Rio de Janeiro.

Petrobras, whose full name is Petróleo Brasileiro, had promised to unveil its spending plans in September but delayed the announcement several times because of the world’s financial turmoil.

In 2007 and 2008, Petrobras and partners including Repsol YPF of Spain and the BG Group of Britain discovered vast deposits of oil under more than 4,000 meters of water, rock and salt.

Although the finds are at previously untapped depths and will be costly to extract, they hold an estimated 8 billion to 12 billion barrels of oil, according to Petrobras figures. Company officials and oil experts say that other reserves of that size could be nearby.

One of the finds alone, named the Tupi, holds the equivalent of 5 billion to 8 billion barrels of light crude oil and is the world’s biggest new field since a 12-billion-barrel find in Kazakhstan in 2000.

President Luiz Inácio Lula da Silva of Brazil has said repeatedly that developing these oil reserves is vital to the country’s future, and Petrobras has set aside $28 billion to that end.

In all, new drilling could produce 219,000 barrels a day by 2013, 582,000 barrels a day by 2015 and 1.82 million barrels a day by 2020, he predicted.

Natural gas extraction would rise from 7 million cubic meters a day in 2013 to 40 million a day in 2020, the company added.

Petrobras produced a daily average of 2.18 million barrels of oil and gas last year.

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Lula’s last lap


EPA

REPEATS are often disappointing. It is rare indeed to find a president in his second term with an approval rating of 80%, as Brazil’s Luiz Inácio Lula da Silva now enjoys. No American president since the second world war has managed it. In Latin America, only Colombia’s Álvaro Uribe at the height of his success last year against the FARC guerrillas has touched a similar level of adoration. So Lula, a pragmatic former trade-union leader, is entering his penultimate year in office in a position in which he ought to be able to do almost anything.

Yet this apparent omnipotence is illusory, not least because it will be brief: by early 2010 the president will start to be overshadowed by the campaign to elect his successor. He is also constrained by his own left-wing Workers’ Party (PT); by his political allies; by the economic troubles that only recently reached Brazil’s shores and have yet to be felt to their full extent; and by his temperamental compulsion to preserve his popularity. “I would not like to be called a populist,” he sometimes says, “but I do like to be popular.” (From The Economist)

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Brazil’s Embraer, fourth largest aircraft manufacturer in the world, has announced it is doing really well in spite of the crisis. Associated Press has reported the company delivered 204 jet planes last year, a 21 percent increase over the 169 jets delivered to buyers a year earlier.

The jet maker also announced it has $20.9 billion in firm orders for its planes as of Dec. 31. In 2008, the company delivered 162 midsize jets used for regional routes, 36 executive jets and six jets for military and government customers.

Embraer was Brazil’s largest exporter from 1999 to 2001 and the second largest in 2002, 2003 and 2004. It currently employs more than 23,509 people, 87.7% based in Brazil.

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