Brazil

Brazilian oil production was already above last year’s average by August

15 Dec 2017   Brazil

Data through August for Brazil show oil production was already 3 percent above the full-year average from 2016, a country profile revealed. In a country profile, the U.S. Energy Information Administration said Brazil through August produced an average of 3.3 million barrels per day in oil and other petroleum liquids. That’s up from the full-year 2016 average of 3.2 million barrels per day. Much of the oil from the offshore Santos basin is buried underneath a thick layer of salt on the ocean floor and producers have been able to crack into that in recent years. The output from pre-salt basins has accelerated since 2009 as exploration and production technology acclimates to the region’s tough conditions. “Brazil’s pre-salt oil production […]

Production from offshore pre-salt oil deposits has increased Brazil’s oil production

15 Dec 2017   Brazil

U.S. Energy Information Administration, International Energy Statistics Brazil has produced 3.3 million barrels per day (b/d) of petroleum and other liquids so far in 2017, according to data through August, up from 3.2 million b/d in 2016, making it the ninth-largest producer of petroleum and other liquids in the world. Production of crude oil in Brazil increased in recent years as producers targeted large, offshore, pre-salt oil deposits. Brazil’s pre-salt oil production in 2016 reached a record 1.02 million b/d, surpassing the 2015 production level by 33%. Pre-salt oil deposits are located offshore under deep, thick layers of rock and salt and require substantial investment to extract. The depths and pressures involved in pre-salt production present significant technical hurdles. Despite these challenges, however, pre-salt crude oil production in Brazil has increased significantly since it began in 2009. Pre-salt resources were first discovered in Brazil’s offshore Santos Basin in […]

Mexico Blames Brazil For Failing Auction

9 Dec 2017   Brazil, Mexico

The state-run oil company PEMEX blamed the failure of a recent deep-water Gulf of Mexico auction in the on competition from ongoing tenders in Brazil, according to a new report from Reuters. Weak investor appetite for Mexico’s blocks was also due to low oil prices, the company added, although 30 oil companies had at least started the pre-qualifying process. “(One) factor that affected appetite for new projects was the investment commitment recently taken on by possible bidders,” Pemex said in a statement. Fearing that interest may wane, Mexico reduced the Pemex stake in the project up for tender from 49% to 40%. The oil regulator eventually canceled the tender for the project due to lack of interest. The disinterest doesn’t bode well for Mexico, who recently opened up its energy industry by ending Pemex’s long monopoly. Mexico’s competition for this auction—Brazil—had accepted bids for its eight blocks in late […]

Total gets first oil out of giant Libra field offshore Brazil

28 Nov 2017   Brazil

French supermajor Total said production started at a field off the coast of Brazil using infrastructure that could produce 150,000 barrels of oil per day. From the pre-salt Santos basin off the coast of Brazil, a reservoir located beneath a thick layer of submarine salt, the company said Monday the first barrels of oil were coming out of the Libra field. “Libra is a major asset in Total’s portfolio and fits into our strategy of investing in highly competitive projects with low break-even points,” Arnaud Breuillac, the company’s president of exploration and production, said in a statement. “The start-up is a major step in the development of this field, and Total is bringing its deep offshore expertise to the […]

The Return Of Deepwater Oil

31 Oct 2017   Brazil, Offshore

In a historic auction for deepwater oil assets in Brazil, the oil majors showed up on October 27 and bought several offshore blocks, indicating a high level of interest in the country after a major policy overhaul allowed private investment. Royal Dutch Shell won half of the blocks that were offered, and Shell was already one of Brazil’s largest foreign investors. After purchasing BG Group for around $50 billion, Shell took a large presence in Brazil. The logic behind Shell’s strategy is that the company argues it can breakeven with oil at $40 per barrel, making Brazil one of the most attractive places to drill offshore in the world. “These winning bids were submitted after our thorough evaluation and add strategic acreage to our … global deep-water growth options,” Shell Upstream Director Andy Brown said. ExxonMobil took one block, expanding its position after winning six offshore blocks a few […]

Shell Wins Three Oil Blocks In Brazil’s Deepwater

28 Oct 2017   Brazil

Oil major Royal Dutch Shell Plc won half the blocks awarded in Brazil’s deepwater oil auction on Friday, while rival BP took two blocks and Exxon Mobil Corp took one in a historic opening of the pre-salt play to foreign operators. Brazil awarded six of the eight blocks on offer in the auction for the rights to pump oil from the country’s coveted pre-salt region, where billions of barrels of oil are trapped below thousands of feet of salt in the country’s Atlantic waters. The wins will bolster Shell’s position as the largest foreign operator in Brazil’s offshore oil sector, second only to state-run oil giant Petroleo Brasileiro (Petrobras). The Anglo-Dutch oil major won one area in consortium with France’s Total SA, another with Petrobras and Repsol-Sinopec, and a third with […]

Shell bets big on Brazil as oil majors snap up offshore blocks

28 Oct 2017   Brazil

Oil major Royal Dutch Shell Plc RDSA.L won half the blocks awarded in Brazil’s deepwater oil auction on Friday, while rival BP ( BP.L ) took two blocks and Exxon Mobil Corp ( XOM.N ) one in a historic opening of the pre-salt play to foreign operators.  Brazil awarded six of the eight blocks on offer in the auction for the rights to pump oil from the country’s coveted pre-salt region, where billions of barrels of oil are trapped below thousands of feet of salt in the country’s Atlantic waters. President Michel Temer said development of the blocks would lead to 100 billion reais ($30.84 billion) in investment from the winning companies and 130 billion reais in royalties and other revenues for the cash-strapped state. The […]

Brazil’s Temer sees $30 billion pre-salt investments, $130 billion in royalties

28 Oct 2017   Brazil

Brazilian President Michel Temer said Friday’s auction of pre-salt offshore oil blocks will generate investments of more than 100 billion reais ($30.8 billion) in Brazil by the winning oil companies. “We had an excellent result,” Temer said in a statement. He said the exploration of the pre-salt reserves should bring in about $130 billion in royalties and other revenues, and the investments will create 500,000 new jobs for Brazil.

Brazil vs Mexico: Latin America’s Fight For Big Oil’s Money

27 Oct 2017   Brazil, Mexico

Brazil and Mexico are competing for a diminishing resource: the investment dollars of oil majors. HOUSTON/RIO DE JANEIRO, Oct 26 (Reuters) – Brazil and Mexico are competing for a diminishing resource: the investment dollars of oil majors beating a retreat from the big-ticket offshore projects they once coveted. After two waves of resource nationalism that left few openings in Latin America for energy giants such as Exxon Mobil Corp, Royal Dutch Shell Plc and Total, the tables are turning. Governments throughout the continent are enacting reforms and changing contract terms to lure oil firms that have slashed spending as they adapt to lower crude prices. Global policy changes to address climate change have given an added sense of urgency to governments in the region and worldwide that are sitting on oil and gas reserves. They want to pump it before it becomes less valuable. The competition pits Brazil’s high-cost […]

Big Oil executives jet to Rio for deepwater oil sale

27 Oct 2017   Brazil

Brazil will auction eight blocks in its coveted deepwater oil region on Friday, a prospect that has lured top executives from the world’s biggest oil companies to Rio de Janeiro for the bidding round. The oil firms and Brazilian officials expect to see aggressive bidding for the more than 12 billion barrels of estimated oil reserves on offer. “It’s going to be competitive,” Bernard Looney, chief executive for upstream at oil major BP ( BP.L ), told Reuters on the sidelines of an industry conference in Rio this week. The blocks are in a region with prolific oil production from fields known as pre-salt, where crude and gas sit beneath thousands of feet of salt under the deep Atlantic waters off eastern Brazilian shores. President Michel Temer’s government has enacted reforms to make the energy sector more attractive to oil majors, and for the […]

Shell: Breakeven For Brazilian Pre-salt Less Than $40

26 Oct 2017   Brazil

Shell is confident that it can produce oil from Brazil’s promising prolific pre-salt layer for less than $40 per barrel, that’s why the supermajor is taking part in this week’s Brazilian auction, Wael Sawan, Executive Vice President Deepwater at Shell, told Reuters on Wednesday. The pre-salt layer holds high-quality and prolific oil reserves, and recent Brazilian reforms have made them more attractive assets, Sawan told Reuters on the sidelines of an oil industry event in Rio de Janeiro. Shell believes that it can extract oil from those fields below its targeted breakeven cost of $40 a barrel, otherwise it would not have taken part in the auction, Shell’s manager noted. “I think what Brazil really has going for it is a naturally blessed subsurface that allows it to compete with the best of what’s out there in the world,” Sawan told Reuters. Brazil will hold on October 27 the […]

Study: expanding Brazilian sugarcane for ethanol could reduce global CO2 emissions by up to 5.6%

25 Oct 2017   Biofuels, Brazil

Vastly expanding sugarcane production in Brazil for conversion to ethanol could reduce current global CO 2 emissions by as much as 5.6%, according to a new study by an international team led by researchers from the University of Illinois. This would be a massive undertaking, involving the conversion of hundreds of thousands of square miles—at its most ambitious, more than the combined land area of Texas and California—to sugarcane fields. However, it could be accomplished without impinging on environmentally sensitive areas in Brazil and while allowing for the expansion of other agricultural crops and human needs, the researchers report in a paper in the journal Nature Climate Change . The carbon-related costs of converting the land to sugarcane fields were included in the analysis. The team looked at three scenarios that would increase the sugarcane footprint in Brazil between 37.5 million and 116 million hectares (144,788 to 447,879 square […]

Brazil Sees Oil Exports Soar

23 Oct 2017   Brazil

Colombia production is holding a plateau over the past year after a large decline in the last part of 2015 and first half of 2016. August value was 858 kbpd (down 0.04 percent y-o-y). (Click to enlarge) Colombia oil reserves at the end of 2016 were 1.66 Gb (down 16.8 percent from 2 Gb in 2015 which followed a drop from 2.31 Gb in 2014). At the average 2016 production rate of 885 kbpd this gave an R/P of 5.1 years, the lowest for any significant producing country. Most of their production is heavy oil. Ecoptrol, which accounts for more than three quarters of Colombia’s crude and natural gas reserves and output, estimated about 45 percent of their decline was due to the “pronounced fall in oil prices”. Individual field production is reported through the Colombian hydrocarbon agency (ANH), but data is only available to June. The previous decline […]

Brazil to ramp up oil production before ‘renewable era’ hits: official

12 Oct 2017   Brazil

Brazil plans to boost oil exploration and production to seize on its reserves before the world enters the “renewable era” and other technologies hurt demand for the fossil fuel, Deputy Energy Minister Paulo Pedrosa told Reuters on Wednesday. Brazil’s state-run oil company Petrobras LPG fuelling stations are seen in the Guanabara bay in Rio de Janeiro, Brazil October 7, 2017. REUTERS/Pilar Olivares “The stone age did not end for lack of stone, and the oil age will not end for lack of oil,” Pedrosa said in an interview. “A race has begun to take advantage of the resource, because in the future it might not have value.” Since 2006, Brazil has discovered potentially massive stores of oil and gas trapped below a layer of salt under the ocean floor off its coast, but slumping global oil prices have complicated efforts to exploit these reserves. Pedrosa […]

The Next Big Offshore Boom Is About To Happen Here

2 Oct 2017   Brazil

Say what you will about offshore oil and gas exploration, but it’s still alive and kicking—high production costs and all. The latest demonstration of the viability of deepwater projects, even in the post-2014 oil industry era, comes from none other than Brazil. On Wednesday, the country’s National Petroleum Agency put 287 oil and gas blocks up for auction, and only 37 found buyers. Too few, it might seem at first. But the proceeds came in at more than US$1.2 billion —a hefty share of this pledged by heavyweight Exxon. The NPA’s expectations for the proceeds were much more modest, at $157 million. The 287 blocks auctioned are just the first portion of a number of deposits that hold an estimated 10 billion barrels of crude in proven reserves. No wonder, then, that as many as 30 companies took part in the bidding round—the first of a total nine rounds, […]

Exxon’s Big Bet on Brazil Oil Could Signal Major Pre-salt Role

30 Sep 2017   Brazil

Exxon Mobil Corp’s big bet on Brazil’s offshore Campos basin shows its willingness to pay up to replenish its reserves and may pave the way for hefty bids in October auctions in the country’s rich pre-salt areas, analysts said. Marking a return to Brazilian exploration after a five-year absence, Exxon took eight blocks in the coveted basin, one of Brazil’s most productive, at an auction on Wednesday. Six were taken in partnership with state-run Petroleo Brasileiro (Petrobras). The auction’s record take included an Exxon bid of 2.24 billion reais ($704 million) for one block, Brazil’s highest-ever such bid. That showed how oil companies that can afford significant overheads are willing to shell out for and develop high quality reserves in far-flung locations, despite oil […]

Brazil Lets In Big Oil Firms After Keeping Them Out for a Decade

26 Sep 2017   Brazil

Brazil will on Wednesday begin reversing what industry officials say was a costly and ultimately disastrous decision a decade ago: setting aside billions of barrels from the Western Hemisphere’s largest oil discovery in 30 years for its state-run oil firm at a time when deep-pocketed foreign companies were clamoring to invest. Brazil removed key acreage from a 2007 auction that could have yielded $100 billion in signing bonuses plus hundreds of billions more in spending commitments when the price of oil was near record highs, according to several former executives at Western oil companies. Now, Brazil may generate just a fraction of what it could have as it looks to […]

Petrobras Creditors Agree To $6.22 Billion Debt Swap

26 Sep 2017   Brazil

Petrobras creditors have agreed to swap $6.22 billion in Petroleo Brasiliero bonds that are due between 2019 and 2021 for long-term securities, allowing Brazil’s state-owned oil company to lower its debt burden during a period of chronically low oil prices. In a Monday filing, Petrobras said it would swap $2.285 billion of crude oil debt into 5.299 percent bonds due in 2025 and another $3.935 billion into 5.999 percent securities maturing in 2028. In a bid to raise cash, Brazil proposed a plan to put up for privatization 57 major state infrastructure assets, including the sale of some or all of its 51-percent stake Electrobras, the state utility giant, by the middle of next year. “The overall perception is that the company can finally free itself from state control and that it will adopt meritocracy and negotiate better terms with suppliers,” Electrobras chief executive Wilson Ferreira Jr told Reuters […]

Brazil oil auction to gauge investor appetite amid reforms

26 Sep 2017   Brazil

Brazil’s oil auction this week will test whether a raft of market-friendly reforms under President Michel Temer can tempt investors back to a sector tarnished by a corruption scandal at state-controlled oil firm Petróleo Brasileiro SA. Brazil will auction 287 onshore and offshore exploration blocks on Wednesday, raking in at least 1.69 billion reais ($537 million) if all are assigned. Wednesday’s auction is Brazil’s fourteenth round for blocks outside of the coveted pre-salt area and should gauge appetite for the country’s second and third pre-salt rounds next month. Thirty-two companies will vie for the blocks this weeks, including Royal Dutch Shell Plc, BP Plc, Exxon Mobil Corp, Repsol, Total SA, Rosneft, CNOOC and Brazil’s state oil firm, known as Petrobras. The auction […]

Exclusive: Brazil’s Braskem terminates supply contract with Venezuela’s PDVSA

22 Sep 2017   Brazil, Venezuela

Brazil’s Braskem has terminated a contract to buy light virgin naphtha and natural gasoline from Venezuela’s state-run oil company PDVSA that would expire this month, the petrochemical company said on Thursday. The Sao Paulo-based company declined to comment on the reason for ending the long-term supply agreement, but said the contract represented less than 0.1 percent of its annual naphtha consumption. “Braskem continues regular purchases of raw materials, keeping up its industrial operations in Brazil,” it said in a statement to Reuters. Petróleos de Venezuela, S.A., commonly known as PDVSA, did not reply to a request for comment. The Venezuelan energy company has been struggling to maintain its commercial relationships amid difficulties paying providers and because of sanctions imposed […]

Brazil’s Pre-Salt Areas Attract 17 Major Oil Bidders

15 Sep 2017   Brazil

As many as 17 companies have registered to bid next month in two rounds of exploration license awards in Brazil’s pre-salt layer, Brazilian Oil and Gas Secretary Marcio Felix said on the sidelines of an event on Thursday. Brazil is eager to award new exploration licenses in the most promising blocks in its pre-salt layer as it tries to boost its economy and attract more foreign investment. Before Felix gave the exact number of the different bidders in the two rounds, the country’s oil and gas regulator ANP had previously said that 10 firms had expressed interest to take part in the second round, with 15 companies registering to bid in the third round. Now the exact number is known—17—and all are major oil firms, Reuters quoted Felix as saying. Interest in pre-salt areas by majors has grown since Brazil removed in October last year the requirement by law […]

Fifteen Oil Majors Interested In Brazil’s Round 3 Pre-Salt Auction

12 Sep 2017   Brazil

Fifteen companies have pre-registered for Brazil’s third auction of oil exploration rights in the pre-salt area while ten companies have expressed interest in the second round, oil regulator ANP said on Monday. ANP told Reuters that all the companies were oil majors. The two auctions will take place on Oct. 27. Through production sharing contracts, firms will be able to bid on eight blocks in the Santos and Campos basins in the pre-salt area, where hydrocarbons are trapped under thick layers of salt beneath the ocean floor. The fields are considered among Brazil’s most prized energy assets. Those already under production are showing above-average productivity. The companies had a deadline of Sept. 8 to fill out an initial form expressing interest in the bidding process, but […]

Petrobras extends deadline in sale of seven exploration areas

9 Sep 2017   Brazil

Brazil state-controlled oil firm Petrobras extended the deadline for interested parties to sign non-disclosure agreements in order to access technical, legal and financial information related to seven exploration areas it is seeking to sell. Petroleo Brasileiro, as the company is formally known, said in a stock exchange filing on Friday that it would extend the deadline until Sept. 29 “in view of interest from the market.” The shallow water areas are located in the states of Ceara, Rio Grande do Norte, Sergipe, Rio de Janeiro and Sao Paulo. The Brazilian company is in the midst of a campaign to sell $8 billion worth of assets this year as it seeks to reduce its debt burden. The filing did not say when the original deadline was.

Brazil Aims To Privatize State-Owned Utility Company

4 Sep 2017   Brazil

Imagine the setting. A conference room full of senior politicians. “The tapes are bad”, one says. “A lot of stuff about bribes”. Another adds, “Yeah, and we’re polling in the single digits. Any lower and we’ll resemble Japanese interest rates”. A conference room deep in the bowels of the White House in Washington, DC? Nope. Brasilia, Brazil. The scope of the Brazilian scandal, called locally “Lava Jato” (Car Wash), is truly impressive. It may encompass two former presidents, the sitting president, the heads of both houses of Congress, ninety lawmakers and one third of President Temer’s cabinet. Twenty different political parties implicated in this scandal in which bribes paid allegedly amount to two billion dollars. But, despite the disorder caused by the corruption charges, President Temer is desperately trying to stabilize the wobbly Brazilian economy and get the government’s finances in order. One key measure: privatize a vast swath […]

Total Could Miss Out On 14 Billion Barrel Brazilian Reserves

30 Aug 2017   Brazil

Total’s study on the environmental impact of drilling in one of the Amazon’s basins hit a roadblock on Tuesday when Brazilian regulator Ibama said it rejects the validity of the efforts. The subject of the study is an area that could contain up to 14 billion barrels worth of oil reserves. Total has spent four years trying to validate the estimates to determine the commercial viability of a venture in the area, but the discovery of a sensitive coral reef near the blocks that would be up for tender has put the environmental approval process in limbo. “At this point, the environmental licensing process is still underway,” a Total spokesperson said in an emailed statement to Reuters. Ibama says it seeks additional information on how Total plans to keep the area’s wildlife safe from the polluting effects of oil extraction in the area. “Oil dispersion modeling, for example, can […]

This Nation Just Declared An Unprecedented Sale In Energy

26 Aug 2017   Brazil

The economy of Brazil has been struggling lately. Weighed down by the collapse in oil prices, and a massive corruption scandal — which this week saw the former CEO of state oil company Petrobras formally indicted . But Brazil’s government is striking back. Announcing Wednesday a sweeping slate of asset sales — that may open up some of the biggest opportunities the country has ever seen in energy and mining. Brazil’s legislators put forward a list of 57 major state infrastructure assets that will be put up for privatization. Giving investors access to these strategic sectors for the first time ever. Many of these are transport-related — including ports, highways and even airports. But the list also includes power transmission infrastructure across the country. In fact, the government is putting the majority of its electrical grid up for sale. Announcing it will sell some or all of its 51% […]

Brazilian Corruption Charges Could Impact Mexico’s Oil Boom

22 Aug 2017   Brazil, Mexico

Last year, Brazilian construction firm Odebrecht and affiliated petrochemical company Braskem pleaded guilty to bribing officials in 12 countries to secure high-paying contracts. The firm agreed to a payment of at least $3.5 billion, the largest penalty in history for a foreign bribery case. Now, months later, the scandal continues to escalate as new allegations pop up. The latest addition to the scandal is Mexican state oil company Pemex, which has now been swept up in the widespread accusations of corruption. While Pemex officials have already been called for testimony in Odebrecht-related investigations back in April , this week the plot thickened. On Saturday accusations surfaced that Emilio Lozoya, the former chief executive of Pemex, accepted $10 million in bribes from Odebrecht in exchange for sending the company lucrative contracts. The bribes allegedly started rolling in in March 2012, when Lozoya began his reign at Pemex, until he left […]

Brazil’s Pre-Salt Extraction Costs Fall To $8 Per Barrel

14 Aug 2017   Brazil

Not too long ago Brazilian state oil company Petrobras was the most indebted oil & gas company in the world. The long-suffering company has faced dire mismanagement while being weighed down by allegations of involvement in Brazil’s widespread corruption. But that’s all changing. Despite being a subject of the massive Lava Jato investigation, in which executives are accused of accepting bribes in exchange for contracting construction firms at inflated rates, things are turning around for Petrobras. Now, thanks to new management and their recently-discovered pre-salt wells, Brazil is the comeback story of the year. Discovered only 10 years ago , Brazil’s pre-salt area has rapidly become the biggest oil-producing area in the country. Just this week Petrobras discovered commercial oil in a whole new pre-salt area known as the Marlim Sul Field in the Campos Basin, located about 71 miles off the shore of Rio de Janeiro. Because pre-salt […]

Trump Might Start Trade War With Brazil Over Ethanol Imports

9 Aug 2017   Brazil

President Donald Trump’s America First rhetoric is doing no favors for US ethanol producers, who are hoping to avoid a trade fight with fuel buyers in Brazil. (Bloomberg) — President Donald Trump’s America First rhetoric is doing no favors for U.S. ethanol producers, who are hoping to avoid a trade fight with fuel buyers in Brazil. The administration has started making noise about rising imports of Brazilian biofuel made from sugar. That’s got the South American producer mulling tariffs or a quota on imports of U.S. fuel made from corn. A trade spat would be a much bigger problem up north because the U.S. ships more than four times as much to Brazil than it buys from the country. The brewing trade dispute is gearing up to pit the world’s two biggest ethanol producers against each other. As the rivalry heats up, hedge funds seem to be signaling that […]

Against All Odds: The Return Of An Oil Giant

2 Aug 2017   Brazil

Only a year ago, the Brazilian state company Petrobras seemed a complete basket case, an exemplary case of how not to lead a company that is rich in both resources and know-how. Today, however, the Brazilian state giant has demonstrated unhoped-for prowess in its quest of ridding itself of the disagreeable label of being the most indebted oil & gas company in the world. Brazil is still susceptible to sporadic political earthquakes, emerging from revelations of which the Operation Car Wash has still not exhausted itself – like the sudden death of Supreme Court Justice Teori Zavascki in a plane crash this January – and it will take Petrobras, having played a major role in previously existing kickback schemes, write-downs and money laundering, a good deal of time to clean itself of the acquired bad optics. Still, Petrobras, it seems, has bent to task. The new management of Petrobras […]

Could Brazil Derail The OPEC Deal?

28 Jul 2017   Brazil, OPEC

Brazil is a major oil producing country, but in 2016 was still a net importer, though imports dropped significantly and they have been a slight exporter overall so far this year. It is one of the few countries that have consistently grown production over recent years, and possibly the only non-OPEC country that will show overall growth of conventional crude in the ten years to (say) 2022. Production Brazil ANP or anp (Agência Nacional do Petróleo, Gás Natural e Biocombustíveis) publishes Excel files for monthly production on all wells. In theory it should be easy to extract field data from these, in practice not so much. The files are downloaded from a database but not always consistently, sometimes in field units sometimes SI, sometimes one month per file sometimes more, around 2010 onshore and offshore was split but naming conventions weren’t always followed, handling of wildcat wells seems a […]

Brazil: Reserves and Production

26 Jul 2017   Brazil

Guest Post by George Kaplan Brazil is a major oil producing country, but in 2016 was still a net importer, though imports dropped significantly and they have been a slight exporter overall so far this year. It is one of the few countries that have consistently grown production over recent years, and possibly the only non-OPEC country that will show overall growth of conventional crude in the ten years to (say) 2022. Production Brazil ANP or anp (Agência Nacional do Petróleo, Gás Natural e Biocombustíveis) publishes Excel files for monthly production on all wells. In theory it should be easy to extract field data from these, in practice not so much. The files are downloaded from a database but not always consistently, sometimes in field units sometimes SI, sometimes one month per file sometimes more, around 2010 onshore and offshore was split but naming conventions weren’t always followed, handling […]

Exxon To Enter The Most Sought After Oil Play In The World

6 Apr 2017   Brazil

The Wall Street Journal reported that Exxon is looking to jump into Brazil’s offshore sector, one of a few areas of exploration where there are still enormous volumes of known but underdeveloped oil reserves. Brazil’s pre-salt – oil trapped beneath a thick layer of salt – is looking increasingly attractive to international oil companies because of a law change in 2016 that opened up the sector to investment from private companies. Up until recently, the vast pre-salt was under the domain of Brazil’s state-owned oil company Petrobras. International companies could work as junior partners in a joint venture, but by law, Petrobras had to take the lead on any offshore drilling project and hold at least a 30 percent stake in any project. That requirement was enacted after a handful of truly massive oil discoveries put Brazil’s pre-salt on the map a decade ago. Triple-digit oil prices led Brazilian […]

Exxon Eyes Brazil Expansion

5 Apr 2017   Brazil

Exxon Mobil Corp., the only big oil company without a major foothold in Brazil, is in talks to gain access to the country’s prized deep-water resources, according to people familiar with the matter. The talks have included discussions about a joint venture partnership through which Exxon would invest in projects with state-oil firm Petróleo Brasileiro SA, or Petrobras, as well as potentially buying stakes in offshore tracts the…

Petrobras says Exxon expressed ‘strong interest’ in pre-salt oil

5 Apr 2017   Brazil

Brazil’s state-run oil company Petroleo Brasileiro SA Chief Executive Officer Pedro Parente talks during a news conference in Rio de Janeiro, Brazil, January 11, 2017. REUTERS/Nacho Doce U.S. oil company Exxon Mobil Corp ( XOM.N ) expressed to Brazil’s state-controlled company Petrobras ( PETR4.SA ) “strong interest” in the exploration of deep-water oil fields off the Brazilian coast, Petrobras Chief Executive Pedro Parente said on Tuesday. “Considering movements towards a strategic partnership, we have nothing concrete with Exxon, but they have certainly expressed strong interest in the Brazilian pre-salt exploration,” Parente told reporters. Earlier on Tuesday, The Wall Street Journal reported that Exxon was in talks to gain access to Brazil’s deep-water oil resources, citing people familiar with the matter. Petroleo Brasileiro Sa Petrobras, familiarly known as Petrobras, and Exxon initially declined to comment on the report, but later Parente briefly spoke about it on his way out of […]

Brazil readies two new FPSOs for subsalt oil and natural gas output: Petrobras

31 Mar 2017   Brazil

Brazil is in the process of preparing two new floating production, storage and offloading vessels, or FPSOs, to start oil and natural gas production in the country’s record-setting subsalt frontier, state-led producer and refiner Petrobras said Thursday. The FPSO P-69 arrived at the Brasfels shipyard in Angra dos Reis, south of Rio de Janeiro, on Tuesday, Petrobras said. The vessel will have 18 processing modules installed onboard before heading out to start production at the Lula Extremo Sul area of the massive Lula Field in 2018, the company said. The new floating production units are part of eight that will be installed offshore Brazil over the next two years, according to Petrobras’ investment plan for 2017-2021. The ultra-deepwater region accounted for nearly 50% of Brazil’s total crude output in January, including a record 1.276 million b/d of oil and 49.53 million cu m/d of natural gas from 73 wells. […]

Petrobras Cleared to Proceed With Asset Sales

16 Mar 2017   Brazil

Brazil’s federal auditing court overturned a preliminary ruling Wednesday that had frozen asset sales by Petróleo Brasileiro SA since December, removing a major roadblock to the state-run oil company’s plan to reduce its massive debt load. The court, known as the TCU, said in a statement late Wednesday that Petrobras had presented documentation showing that “risks” in the company’s divestment program had been…

Brazilian crude threatens Oceania, Middle East suppliers’ Asian market share

8 Mar 2017   Brazil

China’s strong appetite for Brazilian crude has set off alarm bells among various producers in Oceania and the Middle East, prompting Australian and key Persian Gulf crude suppliers to slash their selling prices in an effort to remain competitive and protect their market share in Asia, market participants said Wednesday. Since late 2016, China saw a dramatic increase in Brazilian crude imports and the trend remained firmly intact with two Chinese state-run oil companies purchasing 5 million barrels or more of heavy sweet crude from the South American state for loading in March, according to a source with direct knowledge of the deals. March shipping fixtures seen by S&P Global Platts also showed that PetroChina has fixed the San Jacinto to move 130,000 mt of crude oil for March loading from Brazil to China, while trading company Vitol also booked Suez Hans and Fraternity to move a combined 260,000 […]

Total teams up with Brazil’s Petrobras

2 Mar 2017   Brazil

French energy company Total announced alongside its Brazilian counterpart, Petrobras, both sides were teaming up in a $2.25 billion joint venture agreement. “These new partnerships together with a reinforced technological cooperation should create significant synergies and values, mutualizing our operational excellence and further reducing costs on our joint projects for the benefit of both companies,” Total CEO Patrick Pouyanne and Petrbras CEO Pedro Parente said in a joint statement . Total’s payments to Petrobras include $1.6 billion in cash. The Brazilian company, known formally as Petroleo Brasileiro, handed over enough of a stake in some of its more lucrative fields so that Total is a minority partner. The Brazilian company said the joint venture agreement with Total aligns with a five-year plan to improve its financials […]

Lured by discounts, U.S. East Coast refiners snatch up Brazilian crude

1 Feb 2017   Brazil

The Philadelphia Energy Solutions oil refinery owned by The Carlyle Group is seen at sunset in Philadelphia March 26, 2014. Picture taken March 26, 2014. U.S. East Coast refiners are on a Brazilian crude buying spree, market sources say, displacing West African cargoes as producers such as Royal Dutch Shell and Norway’s Statoil sell rising output from fields off Brazil’s coast. The uptick in Brazilian imports into the region comes as the only Latin America producer to increase output in recent years seeks markets close to home for the oil it is pumping from the massive offshore subsalt oilfields under development. February deliveries of Brazilian crude into the U.S. East Coast are expected to hit 2.4 million barrels, or 86,000 barrels-per-day, the highest monthly volume since at least 2009, according to the U.S. Energy Information Administration and Reuters shipping data. The strong February numbers follow a surge in Brazilian […]

Exclusive: Brazil plans two subsalt auctions in 2017, another in 2018

20 Jan 2017   Brazil

A man works at the Cidade Angra dos Reis offshore platform at the Lula oil field, about 300 km (186.4 miles) from the coast of Rio de Janeiro, February 16, 2011. Brazil plans to hold two subsalt oil auctions in 2017, putting new exploration areas up for bidding in November for what should be the “most competitive” round of the year, Oil Secretary Marcio Felix said in an interview on Thursday. The auctions, an effort to lure foreign investment in a sector that for much of the past decade was the object of protectionist policies in Brazil, will be the first since 2013 for the offshore region known as the subsalt, where giant discoveries were made starting about a decade ago. The first auction, expected in the first half of this year, will offer areas next to existing discoveries already in development, Felix said. The November auction will be […]

Divestment streak for Petrobras continues

30 Dec 2016   Brazil

Brazil’s state-run oil company said it closed on the sale of a refinery on the Japanese island of Okinawa as its divestment streak continues. State-run Petroleo Brasileiro, known informally as Petrobras, said it closed on the 100 percent sale of its refinery to Japan’s Taiyo Oil Co. for $165 million. Taiyo gains a refinery with a processing capacity of 100,000 barrels per day and a storage capacity of 9.5 million barrels. “The operation was recorded in the partnerships and divestments program that reached $13.6 billion on the 2015-2016 period,” the Brazilian company said in a statement. “The sale is aligned with the Petrobras’ strategic plan, which aims to optimize the business portfolio.” The sale of its Japanese refinery comes one week after French supermajor Total gained access to two of Brazil’s largest oil fields in a $2.2 billion deal with Petrobras. The deal […]

Total nabs Brazilian pre-salt in Petrobras deal

23 Dec 2016   Brazil, France

French energy company Total said it was building up its prospects in South America in a partnership that gives it access to some of Brazil’s biggest oil fields. In a deal valued at $2.2 billion, the French supermajor gained access to two of Brazil’s largest oil fields in an acquisition of interests from state-supported Petroleo Brasileiro, known more commonly as Petrobras. Both sides already work together on assets in the U.S. waters of the Gulf of Mexico and in the giant Libra oil field off the coast of Brazil in the so-called Santos basin. Total gets a tighter hold over the prolific Santos basin, while Petrobas has the option to take on more interest in deepwater exploration off the coast of Mexico. “These agreements will reinforce Total’s position in Brazil through access to outstanding pre-salt resources,” Total Chairman and CEO Patrick Pouyanne said in […]

Petróleo Brasileiro Signs Financing Deal with China Development Bank

17 Dec 2016   Brazil, China

Brazil’s state-controlled oil company Petróleo Brasileiro SA said Friday it signed a $5 billion financing deal with the China Development Bank, the latest example of a troubled Latin American issuer reaching to deep-pocketed Chinese institutions for help. The 10-year financing arrangement coincided with the signing of a commercial contract whereby Petrobras, as the energy company is known, will supply 100,000 barrels of oil a day to three Chinese firms. The firms are China National United Oil Corporation, China Zhenhua Oil Co. Ltd. e Chemchina Petrochemical Co. Ltd. This comes as Petrobras, the most indebted oil major in the world with $123 billion of gross debt, looks increasingly unlikely to meet its target of selling $15.1 billion of assets by the end of the year following a number of legal challenges. Brazil’s federal […]

Crippled Latin Oil Giants Get No Miracle Cure in Post-OPEC Rally

For the three titans of Latin American oil — Pemex, PDVSA and Petrobras — last week’s OPEC-driven price rally won’t be enough to halt a slow descent from the ranks of international crude heavyweights. Even as news of the cartel’s 1.2 million-barrel-a-day output cut spurred the steepest three-day oil gain in 15 months, the biggest Latin American producers remain hobbled by financial, political, technical and structural problems. Mexico and Brazil have been turning to outside investors to help boost output, with Mexico on Monday offering up stakes for the first time to drill in its deep waters. Oil prices are an especially pressing issue for the behemoths responsible for large chunks of their local and national economies, all while supplying one of every 13 barrels of crude produced around the globe every day. Unlike North American explorers who were free to fire workers and abandon costly, high-risk projects as […]

Shell Plans to Invest $10 Billion in Brazil Over Next Five Years

11 Nov 2016   Brazil

Oil major Shell is planning to continue investing heavily in Brazil as part of a bid to double its global deep water production by the early 2020s. Shell plans to invest $10 billion in the South American nation over the next five years, Wael Sawan, the company’s executive vice president for deep water, said in an interview this week. That would come on top of the more than $30 billion in capital the company says it has deployed in Brazil, where it operates 5,500 energy stations and acquired a large number of oil-and-gas assets earlier this year via its takeover of BG Group PLC. “We are by far the largest foreign investor,” Mr. Sawan said. “Every single year we will be investing around $2 billion.” Foreign oil firms have been eyeing Brazil […]

Petrobras posts surprising loss amid massive asset impairments

11 Nov 2016   Brazil

Brazilian state-controlled oil company Petróleo Brasileiro SA posted an unexpected third-quarter loss on Thursday after drastically reducing the value of oil fields and other assets amid a severe downsizing and weak oil prices. Petrobras lost a net 16.458 billion reais ($4.9 billion) last quarter, five times more than a year earlier. Despite that, operational and cash flow trends improved and, without an impairment, profit could have totaled 600 million reais, Chief Financial Officer Ivan Monteiro told reporters. The numbers came as Chief Executive Officer Pedro Parente cleaned up a balance sheet with unrealistically priced investments, whose losses were magnified by a stronger currency and a rising cost of capital. The company shaved the value of assets by 15.292 billion reais and of investments by 417 million reais […]

Petrobras to Cut Gasoline and Diesel Prices

10 Nov 2016   Brazil

Brazilian state-run oil company Petróleo Brasileiro SA said Tuesday it has decided to reduce prices for gasoline and diesel, after more than a year of using its near-monopoly in the domestic fuel market to shore up its cash flows. Petrobras’ board decided to reduce the price of diesel and gasoline sold at its Brazilian refineries by 10.4% and 3.1%, respectively, the company said in a press release, adding that the price cuts reflect a drop in international oil prices in recent weeks. Petrobras burned billions of dollars in cash from 2011 to 2014 by subsidizing fuel prices in the domestic market. Now burdened with the global oil industry’s largest pile of debt, the company since last year has sold gasoline and diesel at a hefty markup. But Petrobras executives fear that doing […]

Brazil Oil And Gas Production Reach Record Highs In September

7 Nov 2016   Brazil

The Brazilian government on Friday reported that its oil and gas production rose to record levels in September with a total oil equivalent of 3.36 million barrels per day (bpd). According to data from the Agência Nacional de Petróleo, Gás Natural e Biocombustíveis (ANP) energy regulators, September oil output reached 2.67 million bpd, which represents a monthly jump of 2.4 percent and an annual increase of 11.5 percent. Production from the offshore Lula oil field located in the Santos basin grew to 639,700 million bpd in September; thus, beating the monthly record for a Brazilian oil field previously obtained by the Marlim site in 2002. While oil output rose for the fourth straight month, natural gas production in September climbed to 110.4 million cubic meters per day (cmd). This represents 1.5 percent more than the mount reached in August and a 13.4 percent spike compared to September […]

Brazil To Boost Oil Output, Regardless Of OPEC’s Deal

2 Nov 2016   Brazil

The chances of success for any concerted effort to curb global oil supply are getting slimmer by the day, it seems. OPEC members are arguing among themselves who will need to cut how much; Iran and Iraq both want to be excused from the party for reasons of market share necessity; and Russia – the world’s top non-OPEC producer – is turning vague remarks into an art form. Then there’s Brazil, whose Oil and Gas Secretary this weekend delivered yet another blow to the cartel that once held the reins to the global oil price trends. Over the week, Marcio Felix told media in Vienna that “Yes, the Brazilian production is increasing… I do not have the exact figures, but the production in Brazil will grow in the next few years, we have such plans.” Felix attended a meeting between OPEC and a number of non-OPEC producers, […]