Vienna — Brazil deserves to have a seat in OPEC due to its importance as a key oil producer and exporter, the organization's secretary general said Tuesday.
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OPEC's Mohammad Barkindo said Brazil would be "most welcome" in the producer group, after the President Jair Bolsonaro said last week that he was keen for his country to join OPEC.
"Brazil is a very important producer. They deserve to have a seat within OPEC as a major producer and exporter," Barkindo said at a press briefing in Vienna after OPEC released it World Energy Outlook report.
Barkindo did, however, say that OPEC had not yet received an official application from Latin America's largest oil and natural gas producer Last week, at the Future Investment Initiative in Riyadh, Bolsonaro expressed his interest in joining OPEC and some consultations were arranged with Saudi Arabian energy officials to discuss the potential membership.
Saudi Arabia, is the largest oil producer within OPEC, and is seen as the de facto leader of the group.
Brazil's Mines and Energy Minister Bento Albuquerque also said the government was planning to hold meetings this week to discuss the country potentially joining OPEC.
Brazil, which has long-term commercial ties to countries in the Middle East, was previously invited to join OPEC by Iran during the administration of former President Luiz Inacio Lula da Silva. Talks never advanced beyond the preliminary stages. Brazil, however, has participated in open OPEC production discussions, including sending a delegation to attend talks in Algiers in August 2016.
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SURGING PRODUCTION GROWTH
Oil production in Brazil has been growing rapidly due to the startup of seven new production units started up since last year.
Crude output averaged 3.05 million b/d in August, according to the International Energy Agency, compared with 2018's average of 2.71 million b/d The IEA expects Brazilian output to jump to 3.22 million b/d in 2019.
Brazil's possible inclusion in OPEC has generated concerns about the impact future production limits or quotas could have on interest in upcoming bid rounds, with two important sales of subsalt acreage scheduled for next week.
Brazil's National Petroleum Agency, or ANP, will sell rights to develop 5.2 billion-15.1 billion barrels of oil equivalent discovered by state-led oil company Petrobras in the transfer-of-rights areas this week, with the country's sixth subsalt production-sharing auction that includes five additional exploration blocks set for Thursday.
Brazil also has annual bid rounds and subsalt production-sharing auctions scheduled for 2020 and 2021.
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