Employment in the oil and gas industry in the U.S. is growing at a staggering pace. According to the Bureau of Labor Statistics, employment in the oil and gas extraction sector has grown by 22%. Oil production hotbeds like North Dakota have unemployment rates below 3.5%. If you want a job in the oil industry, though, and the idea of those frigid North Dakota winters is a little to much, then perhaps you should check out this other oil hotbed -- Brazil.
Petrobras (NYSE:PBR), Brazil's national oil company, is planning on spending $237 billion over the next seven years to double its oil output to about 5 million barrels per day. On a per-year basis, that much money is the same as one-third of what all U.S. exploration and production companies will spend combined.
Skills required: Doesn't get seasick
The majority of the oil work that will take place in Brazil lies offshore in what is known as the pre-salt basin. This massive oil field is expected to hold as much as 50 billion barrels of oil and gas and is expected to be a major production area for the next several years. The challenge with this field, though, is that it lies over 170 miles offshore and is 4.4 miles below the ocean's surface. This means that not only will Petrobras need to pour lots of money into exploration and production, but also into building out infrastructure.
To get this infrastructure going, it is signing tons of deals. The company just recently signed a $2.7 billion, eight-year joint venture with Seadrill (NYSE:SDRL) and SapuraKencana. The two companies will build and operate pipe-laying ships beginning in 2016. The original eight years can be doubled to 16 if Petrobras sees fit. Also, FMC Technologies and GE (NYSE:GE) have each received $500 million contracts from Petrobras for offshore equipment needed to get platforms up and running in the pre-salt formation.
Cleanliness is a must
Despite the potential for so much oil in the region, many people in the industry may still be a little skeptical of working offshore Brazil after watching the political fiasco following the Chevron (NYSE:CVX) spill back in 2011. After spilling about 2,500 barrels of oil, both Chevron and rig manager Transocean (NYSE:RIG) were threatened with over $20 billion in fines and civil litigation, as well as a permanent expulsion from the country. That would put the spill at about $8 million per barrel spilled, which is astronomical compared to the about $5,000 per barrel BP spent so far on the Macondo spill that occurred back in 2010.
Much of the hullabaloo subsided -- Transocean is a major supplier of rigs to Petrobras, and it would have put a major dent in the Brazilian company's operations. This is one saving grace that oil companies can take from going into the pre-salt formation -- Petrobras will have a 30% working interest in any well drilled there. As the national oil company, regulators may be a little more hesitant of slapping a major fine on it because the company is also responsible for all oil imports and exports for the country.
What a Fool believes
For Petrobras to reach its lofty production goals, it will need to bring in a lot of help. One of the big questions surrounding Petrobras right now is if the company can execute these major development projects both on time and on budget. One of the big challenges it will face is finding an adequate labor force to get all this oil flowing.
Right now, the Brazilian government stipulates that a certain percentage of labor and equipment in the oil industry must originate from Brazil, but with so much happening in this region it is possible that these regulations could be revised. So for all you roughnecks out there looking to trade in your winter gear for some t-shirt weather, perhaps its time to look into a job off the Brazilian coast.
The Motley Fool recommends Chevron, FMC Technologies, Petroleo Brasileiro S.A. (ADR), and Seadrill. The Motley Fool owns shares of General Electric Company, Seadrill, and Transocean. Try any of our Foolish newsletter services free for 30 days. We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy.