Petrobras Sets Oil Production Record in 2020

Robust Chinese demand for pre-salt crude buoyed Brazil' state-controlled Petobras in 2020, helping spur record output of 2.28mn b/d of oil.

Output for the year was around 5pc higher than the 2.17mn b/d produced domestically in 2019 and tops the prior record of 2.23mn b/d oil production set in 2015, when pre-salt output accounted for around 24pc of total output.

Pre-salt production accounted for around 66pc of total production, including oil and natural gas, in 2020, which hit a record 2.84mn b/d of oil equivalent (boe/d)—up from around 60pc of the 2.77mn boe/d produced in 2019.

"The records demonstrate the good operational performance even in the challenging scenario of 2020, with a greater focus on world-class assets in deep and ultra-deep waters, where Petrobras has shown a great competitive advantage," the firm said.

The increase is mainly the result of exceptional production at the Buzios pre-salt field, lower than expected production losses resulting from maintenance, and lower natural declines in the Tupi and Sapinhoa pre-salt fields.

Petrobras' oil production was bolstered by resilient demand from Chinese refiners. The country attracted around 66pc of the 745,000 b/d Petrobras exported in the first nine months of 2020, compared with around 72pc of the 498,000 b/d of crude that was dispatched by the firm in the same period of 2019.

New export markets such as South Korea, Malaysia and Portugal sustained domestic oil flows, as did global demand for low-sulfur marine fuel, shielding the company from some of the worst effects of the pandemic-induced market fallout.

Divestments and natural declines are expected to pull Petrobras oil production down to around 2.21mn b/d this year, and hold at around 2.3mn b/d between 2022-25. The company's output is slated to increase significantly with new flows from the second development phase at Buzios, according to the company's $55bn five-year spending plant.

The company is targeting total production of around 2.7mn boe/d in 2025, around 80pc of that from the pre-salt.