(AAWSAT, Mosaed al-Zayani, 31.Oct.2019) — Brazil’s President Jair Bolsonaro said Wednesday he was keen for his country to join OPEC, a move that would add the most significant new producer to the oil cartel for years.
“I would personally like Brazil to become a member of OPEC,” Bolsonaro said at the Future Investment Summit (FII) conference in Riyadh.
But he said he would have to consult his economy and energy ministers to ensure they could follow through if a decision was made.
The comments come ahead of a massive auction of oil rights in Brazil, which is boosting output rapidly. OPEC membership would likely require Brazil to limit oil production, potentially throwing future expansion plans into doubt.
The Organization of the Petroleum Exporting Countries groups top exporter Saudi Arabia and 13 other countries. Since 2017, OPEC has had a deal with several non-member producers, excluding Brazil, to limit supply in an effort to bolster prices.
Bolsonaro said at the FII conference that Brazil had larger oil reserves than some OPEC members and that the country would help stabilize the global market as it becomes one of the top six producers in the world.
Brazil would be the most significant producer in years to join OPEC, founded in 1960. The country’s current output would make it OPEC’s third-largest producer, far above that of recent new members such as Congo and Equatorial Guinea.
OPEC delegates said membership talks with Brazil were ongoing, but it had made no formal request to join the group.
Oil output has been rising rapidly in Brazil from offshore fields and production surged by 220,000 barrels per day (bpd) in August to a record 3.1 million bpd, according to the International Energy Agency.
That would make Brazil the third-largest OPEC producer after Saudi Arabia and Iraq, pumping the equivalent of more than 10 percent of current OPEC output, Reuters reported.
Brazilian authorities have approved 14 companies to participate in a huge oil bidding round next week, in which total signing bonuses are expected to set a new record above $25 billion, according to national oil regulator ANP.
The so-called transfer-of-rights auction, scheduled for Nov. 6, has drawn interest from an array of global oil majors.