Brazil oil production breaks record in 2020

Brazil produced, on average, 2.938 million barrels / day last year, up 5.5% compared to 2019, according to ANP

Brazilian oil production broke a record in 2020. In a year marked by an unprecedented contraction in global demand, the country produced, on average, 2.938 million barrels a day last year, representing an increase of 5.5% in relation to 2019, according to data from the National Petroleum, Natural Gas and Biofuels Agency (ANP). For 2021, the expectation is that the Brazilian oil industry will reach a new historical level.

2020 was the second consecutive year of production growth in Brazil. The new record comes even after a weaker second half. The volumes of oil produced in the country have been falling since August. In December, there was a reduction of 1% compared to November, to 2.726 million barrels / day.

The contraction seen in recent months can be explained by the concentration of scheduled shutdowns on platforms in the second half of the year. Due to the impacts of the covid-19 pandemic on the activities on board, Petrobras ended up postponing, for the fourth quarter of 2020, the maintenance activities initially planned for the first semester. The stops affected the main fields in Brazil, including the two largest pre-salt assets in the Santos Basin: Tupi (ex-Lula) and Búzios, which together accounted, in December, for almost half of all oil produced.

According to S&P Global Platts, Brazilian production shows the first signs of recovery in the beginning of 2021. The recovery, however, has taken place at a slower pace than expected. Even so, the company projects growth of 120 thousand barrels / day in production in Brazil in 2021 and 150 thousand barrels / day in 2022, which should guarantee the maintenance of the upward trajectory of the national production curve in the coming years.

S&P Global Platts points out that preliminary production data for the first half of January suggests the first increase in volumes of oil produced in Brazil since August, in a sign that maintenance activities are finally decreasing. Pre-salt production in the first two weeks of the year, for example, was 2.06 million barrels / day, on average, which represents an increase of 140 thousand barrels / day in relation to December.

However, the company’s expectation is that Brazilian production will only resume, in March, the levels prior to maintenance activities. Despite the growth of the pre-salt, the volume produced in Brazil, as a whole, still remains around 150 thousand barrels / day below the pre-stop period.

“As a result of the slower-than-expected recovery, we have built a more gradual increase forecast for the first quarter. We now hope that Brazilian production will reach the pre-maintenance level in March 2021 ”, quotes S&P Global Platts, in a report on the topic.

Until then, the company estimated for this month the complete resumption of production. “The recovery observed in January, although delayed, is a sign that there are no technical problems with the reservoirs, and that the fall in pre-salt production from August to December was due purely to maintenance and temporary,” he said.

Source: Valor