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Bloomberg
Saudi Arabia’s Public Investment Fund will invest $10 billion in Brazil and plans to use the country as a gateway to the rest of Latin America, the Brazilian government said.
The investment comes after talks between President Jair Bolsonaro and Crown Prince Mohammed Bin Salman, Brazilian Foreign Affairs Minister Ernesto Araujo said.
Bolsonaro met Bin Salman in Riyadh, where the sovereign fund is hosting an investment summit this week. The $320 billion fund is mandated with making the kingdom’s economy less dependent on oil.
Bolsonaro’s Chief of Staff Onyx Lorenzoni told reporters that the two governments will form a council over the next two weeks, which will define the sectors and the timing of the investments.
Saudi asks Brazil to join Opec
Saudi Arabia informally invited Brazil to join Opec, President Jair Bolsonaro said, a sign of both the Latin American nation’s growing importance as an oil producer and the challenge it poses to the producer group’s influence on crude markets.
Bolsonaro received the invitation on Wednesday after holding meetings with senior Saudi officials including Crown Prince Mohammed Bin Salman, the Brazilian president said on the sidelines of the Future Investment Initiative conference in Riyadh.
“It is the first step for maybe putting in place this policy in Brazil,†Bolsonaro said, adding that he would need to consult with Brazil’s economic team and energy ministry before agreeing to join. He said in a panel discussion at the conference that he was eager for Brazil to accept the invitation.
If it joined, Brazil could become the third-biggest producer in the Organization of the Petroleum Exporting Countries after Saudi Arabia and Iraq. Brazil’s burgeoning production is complicating OPEC’s effort to prop up crude prices in the face of booming supply from U.S. shale fields and weakening global demand.
Brazil’s oil reserves are bigger than those of several OPEC members, Bolsonaro said. Brazil and OPEC could form “a great partnership†helping each other to stabilize global fossil fuel prices.
Brazil produced 2.71 million barrels a day 2018, according to the International Energy Agency, which forecasts the country’s average output to reach 2.9 million this year and 3.22 million in 2020. Brazilian production in August surged by 220,000 barrels a day to a record 3.1 million, the IEA said in its most recent report.