Brazilian oil production has begun to recover after declining earlier this year as deliberate maintenance and upkeep work has been carried out on several offshore platforms.
With Brazilian output up 25% at the start of the year, platforms are coming back from maintenance and excess oil production. Some analysts say some projects have started earlier than expected and I am ready to help Brazil improve its oil production later this year, and production may exceed forecasts.
A surge in Brazilian crude oil and liquids manufacturing is set to frustrate OPEC+ staff’s market control policies. The coalition has indicated it will begin reducing the largest oil production cuts in the fourth quarter of 2024. However, this fall Brazilian oil production is set to recover from early-year maintenance and add untouched production. The platforms are likely to boost global supply in the same year during which OPEC+ wants to start reducing a portion of the cuts.
Boom in Brazilian oil production
Several of Brazil’s offshore manufacturing platforms have been undergoing maintenance since late last year, resulting in a 25% reduction in its liquids output to 3.73 million barrels per year due to crude oil production. hour (bpd) in early 2024, in line with Bloomberg estimates.
On the other hand, with platforms moving back to carriers, manufacturing has begun to rebound, and, according to Timber Mackenzie, will exceed pre-fall output by 200,000 bpd.
“We believe it is too early to say that production will be disappointing,” Timber Mackenzie analysts told Bloomberg.
State-controlled oil and gasoline giant Petrobras’ manufacturing, for example, fell 5.4% within the first quarter of 2024 compared to the fourth quarter of 2023, “mainly due to higher amounts of losses due to interruptions and maintenance,” as that anticipated in the Strategic Plan 2024-28 (SP 2024-28), and natural decline of mature fields,” the corporate had said in April.
Similar: The US is the rest of the world’s most attractive renewables market
One of the largest declines has been compensated through upstream production in Búzios, Itapu, Meroë and alternative FPSOs within the Marlim, Vodor and Espadim plantations.
Petrobras, which pumps most of Brazil’s oil, said the FPSO Maria Quiteria is currently on its way to Brazil and is expected to reach its location within the third quarter of this year. The unit is planned to commence operations in the last quarter of 2024, thus moving the timeline from the PE 24-28 project in the Juberta farmland within the pre-salt layer of the Campos Basin. This is ahead of initial plans to begin operations at the 100,000-bpd project in 2025.
Petrobras says Maria Quiteria is ready to start operations earlier than planned, and three separate infrastructure projects are expected to start in 2025. They are the Búzios 7 FPSO Almirante Tamandaré with a capacity of 225,000 bpd, the MERO 4 FPSO Alexandre de Gusmão with a capacity of 180,000 bpd, and the Búzios 6 P-78 capable of generating another 180,000 bpd.
Most of these will upload supplies to the market in a year when OPEC+ plans to wind down its cuts regularly, market conditions allow.
According to OPEC’s Monthly Oil Market Record (MOMR), Brazil’s crude oil production has declined per month since November 2023.
In the second quarter of this year, Brazil’s liquids production is expected to average 4.1 million bpd, but will rebound to 4.4 million in the 1/3 quarter.
Brazil’s crude output in April fell by 162,000 bpd month-on-month to a fair 3.2 million bpd, OPEC said in its record. The increase in production was mainly through maintenance, operational problems and natural depletion. The country’s total liquids output fell by 200,000 bpd in April to average 4.0 million bpd, even though it was up more than 100,000 bpd year-on-year.
Brazil is a major contributor to non-OPEC+ supply expansion
Despite a decline in manufacturing in the first half of the year, Brazil is projected to be the third-largest contributor to non-OPEC+ supply expansion in 2024, behind the US and Canada, and the second-largest contributor to the US in 2025. , in step with OPEC.
Brazil’s liquids output is expected to grow by 110,000 bpd of current supply this year, with supply from Brazil expected to rise to 180,000 bpd next year, according to OPEC estimates. In 2025, crude oil production is expected to increase due to production increases at the Búzios, Meroë, Tupi, Marlim and Atlanta plantations. Oil project start-ups are expected in Búzios, Bacalhau, Parque das Baleares and Lapa (Carioca) parks.
Therefore, OPEC itself believes that Brazil will help increase oil supplies from non-OPEC+ producers. This could complicate the OPEC+ alliance’s manufacturing plans for later this year and the year ahead, especially if demand does not grow in the “strong” month expected by OPEC.
A major reason for Brazil’s manufacturing boom may be the ongoing decline at environmental company Ibama, whose workers demand higher wages and working conditions. The accident could lead to increased environmental licensing for untouched oil and gas projects, including a controversial plan by Petrobras to begin drilling in an environmentally sensitive area at the mouth of the Amazon River.
Via Tsvetana Paraskova for OilPrice.com
Additional Management Books from OilPrice.com:
Discover more from news2source
Subscribe to get the latest posts sent to your email.
