21 nov 2019

Petrobras is on track to become the world’s largest oil producer among publicly listed companies by 2030, according to Rystad Energy.

Brazil’s biggest-ever oil auctions in November were generally deemed to be disappointing, receiving muted interest from international exploration and production companies. However, national oil company Petrobras gained nearly full control of more than eight billion barrels of oil in the Buzios field, where a sixth floater is being planned. To develop these and other resources, Brazil is expected to invest $70 billion between 2020 and 2025, solely on field development. This program will have a monumental effect on Petrobras, says Rystad.

“Petrobras can, in a matter of years, become the world’s largest oil producer among publically listed companies. The significance is huge and symbolic,” says Aditya Ravi, vice president of Rystad Energy’s upstream team, specialized in E&P activities in Latin America. “We predict that Petrobras alone can boost its production numbers by more than 1.3 million barrels per day over the next decade.”

During the course of 2019, Petrobras has evolved from fifth place to become the third-largest oil producer, reaching output of around 2.2 million bpd in the third quarter. As it stands, Rosneft and PetroChina top the list over the world’s largest public E&P companies. Based on Rystad Energy’s latest forecasts, Petrobras could be poised to overtake PetroChina over the next few months and Rosneft over the next decade, thanks largely to its latest acquisitions.

Brazil’s production could be pushed from 2.8 million bpd in 2019 average to over 5.5 million bpd thanks to Petrobras’ potential peak output of almost 3.8 million bpd by 2030.

Brazilian officials recently indicated the country wishes to join OPEC, and Brazil’s current output would make it OPEC’s third-largest producer, behind Saudi Arabia and Iraq. However, Ravi cautions: “Joining OPEC could cause a major disruption for Brazil, bringing the country into the spotlight with the potential risk of having its wings clipped by the cartel just as production takes off.”

The potential shift in ranking has been spurred on in the aftermath of the three Brazilian licensing rounds organized over the past five weeks by the National Petroleum Agency (ANP), in which 45 blocks were on offer. Only one-third of the blocks received bids, and the Brazilian Energy Minister remarked that the current legal and tendering structure could warrant a re-think, including a look at Petrobras’ pre-emptive rights on oil blocks.

Earlier this month, Petrobras started up oil and natural gas production at platform P-68 in the Berbigão field, in the Santos Basin pre-salt. Following P-67, in the Lula field, and P-76 and P-77, in the Buzios field, P-68 is the fourth unit to start up in 2019.

Reuters reports that Petrobras expects deep offshore areas to account for 88 percent of its exploration and production activities next year, up from 55 percent currently. The company says is maintaining its selective strategy in bid rounds, focusing in world class deep and ultra-deep water exploration and production assets.


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