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Petrobras on steady course to meet
2020 output target despite Covid-19

Petrobras

Petrobras offshore platform P 70

By Argus

RIO
Petroleumworld 07 22 2020

The Covid-19 pandemic will not knock Brazil's state-controlled Petrobas off its 2.7mn b/d of oil equivalent (boe/d) domestic production target for this year.

Robust demand for low-sulfur marine fuel and an economic recovery in China, the main destination for the country's crude exports, kept the company's oil and gas production stable in the second quarter, and lifted utilisation rates at its domestic refineries.

Domestic liquids production, mainly oil, averaged 2.245mn b/d in April-June, down by 3.2pc from the first quarter but up 9.4pc compared with the same period of 2019.

Production was anchored by pre-salt flows, which climbed almost 31pc year-on-year to 1.527mn b/d a slight decline compared with the first quarter. The increase was mainly the result of production in the Buzios pre-salt field, which produced around 500,000 b/d in the second quarter, up from around 472,000 b/d in the first quarter.

Output from the field offset production stoppages in the Tupi area, the Santos basin region formerly known as Lula.

Deepwater post-salt production averaged 573,000 b/d in the second quarter, down by 7.6pc compared with the previous quarter and lower by 18.1pc year on year. The sharpest fall came from the shallow water, where output fell by 40.3pc compared with a year earlier to around 37,000 b/d. Petrobras stopped production at 62 shallow-water platforms in the first quarter because of economic infeasibility.

The company's total domestic production in the second quarter, including natural gas, was 2.757mn boe/d, a 3.5pc drop compared with the first quarter but up 8pc on a year earlier.

Domestic output in the first six months of 2020 averaged 2.806mn boe/d, up by 11.9pc on a year earlier.

The company's output is likely to fall from September as the start of maintenance stoppages, which were delayed by the pandemic, cut around 200,000 b/d. Petrobras' domestic production target of 2.7mn boe/d, +/-2.5pc, this year is a slight increase over 2019.

Crude exports averaged 688,000 b/d in April-June, down by almost 15pc compared with the first quarter but up by 65.4pc from a year earlier. China's appetite for Brazilian crude has recovered, but more domestic flows are being used in the domestic refineries to produce more fuel for domestic consumption and export, Petrobras' chief executive Roberto Castello Branco said last week.

Utilisation rates at Perobras's refineries averaged 70pc in the latest quarter, bouncing back from a mid-April low of around 59pc thanks to domestic demand for motor fuels and foreign demand for low-sulfur bunkers. Refinery runs reached 78pc at the end of June, down from 79pc in the first quarter but up by 2pc from a year earlier.

Story from Argus Media

argusmedia.com
07 22 2020

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