Petrobras ramps up production
Expanding output from the pre-salt province starts to bear fruit for the Brazilian company
Petrobras, the Brazilian state-owned oil company, recorded strong production performance across the third quarter, as record figures in the pre-salt region helped boost the firm’s upstream portfolio.
Total hydrocarbon output for the quarter reached 2.88mn bl oe/d, a 9.3pc increase over the second quarter, and a 14.6pc rise year-on-year. In August, Petrobras achieved daily and monthly company records of 3.1mn bl/d oe and 3mn bl/d oe respectively.
The growth was dominated by the pre-salt. Across the third quarter, Petrobras extracted 1.37mn bl/d oe from the province, a 17pc rise over the second quarter and up by over 40pc year-on-year. The region now produces over 60pc of all Brazilian oil.
The pre-salt benefited from the ramp-up of six new systems. Four platforms at the Buzios field and two from the Lula field contributed 441,000bl/d to production across the quarter—Buzios output alone increased by 64pc. The P-69 platform at Lula and the P-76 platform at Buzios both reached capacity of 150,000bl/d in just 10 and less than eight months respectively, record pre-salt times.
The next platform planned in the pre-salt is the P-68, which will produce from the Berbigao and Sururu fields in the Santos basin. The platform left the shipyard in September and is in the process of anchoring. Production is expected to start-up over the fourth quarter.
In the post-salt, the floating production storage and offloading (FPSO) vessel Cidade de Campos dos Goytacazes, at the Tartaruga Verde field in the Campos basin, increased production by 48pc over the second quarter, helping to achieve production of 555,000bl/d, boosted by the start-up of nine new producing wells. Total output from the post-salt stabilised at 706,000bl/d, only slightly higher than the previous quarter.
1.37mn bl oe/d — pre-salt production
Elsewhere in the Campos basin, Petrobras reinforced its commitment to acquiring new exploration areas. In the 16th Bidding Round, the Brazilian company won a 70pc operator stake in block C-M-477, in partnership with BP (30pc stake).
In shallow water, Petrobras increased production by 7,000bl/d over the second quarter, achieving 69,000bl/d. The company cited the resumption of operations at platforms PPM-1 and PCH-2, both previously down for maintenance, as a driver of the uptick. But shallow water output still fell by 22.7pc year-on-year, the result of natural decline and platforms PCP1, PCP-2 and P-9 being halted. Onshore production reached 123,000bl/d for the third quarter, up by 1,000bl/d from the previous quarter but a decline of 8,000bl/d year-on-year.
Petrobras says it is still on track to achieve its annual production target of 2.7mn bl/d, with a potential variation of ±2.5pc. “As expected, Petrobras revised its 2019 production guidance down to a more realistic level in July, and we believe the company will either meet or slightly miss that reduced figure,” says Muhammed Ghulam, senior research associate at US bank Raymond James. “Further down the road, shortfalls are a more significant risk factor since the 2023 target—which equates to 5pc annualised growth from the 2019 baseline—strikes us as more aggressive than the 3-4pc range that we anticipate.”
Across the company’s refining business, Petrobras posted a 2.9pc overall production increase compared to the second quarter—a total of 1.82mn bl/d. “Petrobras’ refining activity was up sequentially in the third quarter due to a higher utilisation rate driven by higher Brazilian demand for petroleum products,” says Ghulam. The company achieved 80pc refinery utilisation for the quarter, up from the 76pc in the second quarter.
Diesel production fell by 1.4pc and 5.3pc relative to the second quarter and year-on-year, primarily the result of company preparations to meet the new IMO 0.5pc sulphur content for bunker fuel due next year. Petrobras said production across the quarter for bunker fuel that would meet the new specification reached 110,000bl/d—a 139pc increase compared to just 46,000bl/d in the previous quarter.
Gasoline output grew by 7.2pc quarter-on-quarter and by 8.3pc relative to the same period last year, a consequence of higher demand in the Brazilian market.