BG to invest $2bn in Brazil's oil industry BG Group will invest more than $2bn on research and development in Brazil's booming oil industry in an attempt to become the country's biggest foreign producer by 2020, the head of the company's Brazilian operations has told the Financial Times. Nelson Silva said the FTSE 100 company would make the investments on top of an obligatory national R&D contribution of 1 per cent of gross revenue, helping BG carve out a niche in the market alongside Brazil's state-run Petrobras. Brazil's vast "pre-salt" oil reserves discovered in 2007, which are enough to turn the country into one of the world's top five producers, have helped attract more than 30 foreign oil companies to the industry with particularly large investments from the Chinese. However, a severe shortage of skilled workers and technical expertise has emerged as one of the main barriers to production, making R&D and training programmes key to outpacing competitors as well as winning favour with the Brazilian government. BG's total investments in Brazil before 2020 could be in the "tens of billions," Mr Silva said, with analysts estimating as much as $42bn, making BG one of the biggest UK-based investors in the country. In the nineties we made a strategic decision to invest in Brazil's oil industry. Then the discovery of the Lula field, one of the biggest in the world, just made Brazil even more attractive," said Mr Silva. The oil and gas producer has already invested about $5bn in Brazil, buying into five offshore blocks off the south-east coast, taking a majority holding in the country's largest gas distributor, Comgás, and a stake in the gas pipeline to Bolivia. Mr Silva said the R&D budget of more than $2bn would be spent by 2025, mainly on building a global technology centre in Rio to house up to 100 researchers and setting up training programmes in Brazilian universities. BG also plans to contribute $100m to the government's own training initiative, Science Without Borders, funding Brazilian students to study at universities such as Aberdeen in Scotland and Stanford in California. In other sectors, foreign companies such as Boeing have adopted similar strategies to gain market share in Brazil. This month the US aircraft manufacturer promised to build a global technology centre in São Paulo, in what analysts say was an attempt to increase its chances of winning a $5bn defence contract. BG's R&D investments are part of an ambitious plan to develop reserves of 6bn barrels. Mr Silva said the funds will mainly come from cash generation and project finance, as well as a $5bn global asset sale announced this year.