Booming Brazilian E&P buoys Rio Oil & Gas show but market still waits on Petrobras rig contract awards.

(OM) News from Rio Oil & Gas 2022 is upbeat about the prospects for offshore E&P, according to Evercore ISI’s most recent Offshore Oracle report, with many international operators offering updates on their upcoming projects slated offshore Brazil.

Added to that was Exxon Mobil’s announcement that $13 trillion in new oil and gas investments will be needed through 2050 to support rising demand. According to Evercore, this translates to annual spending of about $500 billion, which, the firm noted, “is above our $450 billion estimate for global E&P spending in 2022.”

For Equinor, Brazil is the largest of its five operating countries outside Norway, and the company expects to take delivery of its Bacalhau FPSO in 2024. Equinor is also expected to sanction the BM-C-33 development in 2023, with the iEPCI already awarded to TechnipFMC, while MODEC could reportedly supply another FPSO in 2027.

Overall, the Brazilian government expects domestic oil production to increase by 70% out to 2030, from about 2.82 MMbbl/d to 4.8 MMbbl/d. The Brazilian energy regulator ANP has forecasted that exploration and appraisal spending will reach $500 million this year, the highest since 2019.

Meanwhile, the offshore drilling rig market continues to wait on contract awards for up to eight rigs from Petrobras’ Lot 3 rig tender. These rigs will be needed to support 12 (and possibly 15) new FPSOs expected to be contracted by Petrobras for presalt work by 2026.

According to the Evercore report, operating companies including Shell, BW Energy, Karoon Energy, Enauta and Trident Energy are also eyeing new developments offshore Brazil, many of which will require an FPSO. Australian-based Karoon Energy will soon begin development drilling at the Patola Field with the semisubmersible drill rig Maersk Developer. It will also reportedly make a final investment decision on its Neon shallow-water field in 2023.

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