Brazil's Oil & Gas Production Hits Record Highs - OilPrice.com
Brazil's Oil & Gas Production Hits Record Highs | OilPrice.com
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Brazil's oil and gas production hit the highest level ever for a single month in July, with production totaling 4.48 million barrels of oil equivalent per day in the period, data from oil regulator ANP has revealed. According to ANP, oil output increased 18.6%Y/Y to 3.51 million barrels per day while natural gas production grew 13.6%Y/Y to 154.08 million cubic meters per day.
Previously, global research and consultancy group Wood Mackenzie predicted that Brazil’s private oil companies will increase oil production by 75% from 1.221Mb/d to 2.123Mb/d by 2030. According to WoodMac, international oil companies such as Shell Plc (NYSE:SHEL), Equinor ASA, (NYSE:EQNR), TotalEnergies SE (NYSE:TTE), Repsol Sinopec Brasil S.A. and Petrogal will be among the top producers thanks to their partnership with federal oil firm Petrobras (NYSE:PBR) in the pre-salt and fields under development.
Petrobras is also expected to grow production at an impressive clip, with output expected to increase 61% from 2.15Mb/d this year to 3.46Mb/d in 2030. Last year, the oil and gas supermajor announced that it will increase 2023-2027 investments by about 15% to $78 billion over the company’s 2022-2026 projected spending. Of the $78 billion planned for capex, 83% or $64 billion is earmarked for E&P activities while 67% of the E&P capex budget will go to pre-salt activities.
The company also plans to boost spending to reduce carbon emissions to ~6% of the total compared with 4% in the previous plan, and will see its decarbonization fund more than double the current $248M.
Earlier, Petrobras CEO Jean Paul Prates reaffirmed those targets but said the company is preparing to preview updates to its business plan next month, including a greater focus on renewable energy sources. Unfortunately, Prates said that investors should not expect the kind of huge dividend payments they enjoyed last year, with the company’s dividend policy likely to undergo adjustments to reflect the reality of a company investing in the future. Petrobras will also continue to focus on its strengths in offshore oil exploration, especially in the "pre-salt" fields off Brazil's coast, but it "will gradually transform itself," Prates said.
By Alex Kimani for Oilprice.com
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