Petrobras will remain the fastest growing oil producer in the world according to a forecast by Rystad Energy
State-controlled Petroleo Brasileiro SA (Petrobras) did most of the bidding during Brazil’s largest-ever auction of oil deposits in November. With oil major interest low, Petrobras gained nearly full control of oil resources in the Búzios field.
The Petrobras win in the giant Búzios deepwater field and other discoveries in the Aram area in the Santos basin mean Brazil is set for US$70Bn in offshore capital investment between 2020 and 2025, solely for field development. With the added investment factored in, Rystad’s estimates reflect the “monumental” impact on Petrobras’ future production.
Rystad Energy vice president Aditya Ravi said “We predict that Petrobras alone can boost its production numbers by more than 1.3M barrels per day over the next decade.”
In 2019, Petrobras leap-frogged from fifth place to become the third-largest oil producer, behind Rosneft and PetroChina, and the company’s Q3 crude oil and natural gas output was 16.5% higher year-on-year, amid record-setting production from subsalt fields.
Rystad projects Brazil’s production will grow from 2.8M barrels per day in 2019 average to over 5.5M. However, this estimate is heavily based on the exploitation of the resources at Aram.
Brazilian President Jair Bolsanaro recently indicated his desire to see Brazil join OPEC.
Brazil’s current output would make it OPEC’s third-largest producer, behind Saudi Arabia and Iraq, but Mr Ravi’s analysis cautioned against precipitous moves, saying “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.” OPEC has a record of cutting production to raise prices.