Brazil to Become One of the World's Top Oil Producers

WPB reports that Brazil is poised to become one of the world's leading oil producers, driven by gargantuan offshore discoveries and large investments in its hydrocarbon sector. Brazil's ultra-deepwater pre-salt fields, discovered originally in the Lula field in 2006, have created a robust offshore oil boom. Not only is Brazil the largest oil producer in Latin America but also attracting large amounts of foreign investment, pushing production to a record high. Trends indicate that Brazil will reach five million barrels per day by 2030, placing it among the top five producers globally.

Latest figures from Brazil's hydrocarbon regulator, the National Agency for Petroleum, Natural Gas and Biofuels (ANP), show the country's rapid growth. Hydrocarbon production has recently hit a record level, with crude oil production at 3.8 million barrels a day and the remainder being generated from natural gas. The figures reinforce the country's ability to grow further and reaffirm plans to position Brazil as a leading oil producer in the world.

A major engine behind this expansion is Petrobras, the federally owned state oil company with a 37% federal government stake. Petrobras is set to unveil a ambitious five-year investment programme of $111 billion, of which $77 billion will be spent on exploration and production. These will include the drilling of 51 new wells, of which most will be situated in offshore basins, and putting 10 new floating production, storage, and offloading (FPSO) ships onstream at the close of the decade. Additional FPSOs will come in subsequent years, along with other exploration projects. Petrobras anticipates that investment will boost its hydrocarbon output to 4.5 million barrels of oil equivalent per day, with pre-salt reserves contributing approximately 80% of output.

Petrobras is aiming at low breakeven assets, keeping competitive costs below $30 per barrel, even during unstable market prices. The company's light, low-carbon-intensity pre-salt crude is increasingly in demand from international markets, particularly China, with the assurance of profitability in changing pricing conditions.

Foreign investment is a significant contributor towards the development of Brazil's oil business. Offshore pre-salt plays have huge representation by global supermajors such as Shell, TotalEnergies, and Equinor. Shell has just begun production at the Mero-4 field in the Santos Basin and is set to develop the Gato do Mato project targeting hundreds of millions of recoverable oil. TotalEnergies is expanding its pre-salt portfolio and searching for near-term output of 200,000 barrels per day. Equinor also picked up new offshore blocks and is developing multiple projects to raise Brazil's overall production.

Industry estimates place Brazil on track to receive more than $120 billion in investment in its oil sector over the course of the decade, the majority of it into offshore pre-salt reservoirs. Breathtaking breakeven prices and the low carbon content of Brazil's offshore crude make these reservoirs highly attractive to both domestic and foreign operators, further solidifying the country as a keystone of production in the decades to come.

In short, Brazil's combination of lucrative pre-salt reserves, shrewd investment by Petrobras, and growing presence of foreign energy companies is solidifying its course toward the upper echelons of global oil producers. Brazil's offshore assets, competitiveness in costs, and green credentials are expected to drive sustainable growth in the coming years, positioning Brazil as a cornerstone piece in the global energy mix.

By Bitumenmag

Bitumen, Oil, Petroleum, Crude