Four important phases are identified in the evolution of the Oil industry in Brazil.
First phase: from the beginning of the industry up to the creation of the National Petroleum Council (CNP), in 1938.
2. Second phase: from 1938 to 1953. The activities, exclusively onshore, were carried out by CNP, until the creation of PETROBRAS and the concept of the state monopoly.
Third phase: from 1953 to 1998. Great development of the industry, supported by the monopoly, held by PETROBRAS. This phase shows two great E&P cycles: an onshore cycle, from 1953 to 1968, and a predominantly offshore cycle. This cycle is marked by great challenges and technological achievements, with the exploration activities in the Campos Basin progressing into even deeper waters as a consequence of the successive discoveries of large fields and substantial increments in the proven reserves, which in this phase reached 9 billion barrels and the production of 1 million BOPD.
Fourth (current) phase: Began with the publication of Law 9.478 in August 1997, which eased the monopoly, opening the market to competitiveness and created the National Petroleum Agency (ANP). The private investors answered immediately and, after 4 successful bidding rounds, 38 new concessionaries are active in the Brazilian sedimentary basins. As a result, it is expected the discovery of part of the 25 billion oil barrels potential to even out the R/P ratio, unbalanced by a vigorous production growth which now reaches 1,5 MMBOPD, on the way to the country's self-sufficiency by 2005. The evolution of the E&P segment in this new phase has the strong effect of increasing the local industry of goods & services with the local generation of value, employment and tax profit. Its economic importance may be gauged by its direct contribution to the Gross Domestic Product (GDP) growth.
The first initiative to find petroleum in Brazil dates back to 1897, when the farmer/landowner Eugênio Ferreira Camargo, after observing an oil seep on an area where he had an old concession for the exploration of coal, drilled the first well in Bofete, state of São Paulo. The well was drilled to a depth of 488 meters and yielded but two barrels of oil. With such a result and the high costs, the activities were discontinued. In 1908, I.C. White, an American geologist contracted by the Brazilian Government to assess the hydrocarbon potential of the Southern states, presented an unfavorable diagnostic due to the abundance of igneous rock.
More serious endeavors on the part of Federal Government explore and produce petroleum in Brazil, in spite of little surface evidence of oil, ocurred as of the First World War (1914-18), with the creation of the Brazilian Geologic and Mineral Service (SGMB), of the Ministry of Agriculture.