Petrobras production up despite global recession and health crisis

The negative effects of the global recession caused by the public health crisis did not substantially impact Petrobras’ production and sales performance in the first quarter, according to the Brazilian oil company’s production and sales report.

Petrobras said on Monday that the average production of oil, NGL, and natural gas was 2,909 kboed, resulting in commercial production of 2,606 kboed and oil production of 2,320 kbpd.

Relative to the same period in 2019 such volumes represent a 14.6 per cent growth in total production, 13.3 per cent in commercial production, and 17.7 per cent in oil production, due to the ramp-up of production on FPSOs that started-up in 2018 and 2019.

The ones in question are the P-74, P-75, P-76, and P-77 in Búzios field, P-67 and P-69 in Lula, and P-68 in the Berbigão and Sururu fields. It is noteworthy that the P-77 platform reached a production capacity of 150 kbpd in just 10.4 months at the start of 2020.

Due to the dramatic decrease in global demand for oil – estimated at 25-30 mmbpd in the second quarter of the year – Petrobras decided at first to reduce oil production in April to 2.07 mmbpd and the utilization factor of refineries from 79 to 60 per cent while reinforcing the logistical export capacity of crude oil, diesel, and fuel oil.

This contributed to the generation of cash and the decline in inventories, allowing reasonable leeway in storage capacity, as well as avoiding the adoption of costly measures such as the chartering of ships to store liquids.

With the better than expected evolution of demand for products, Petrobras decided to gradually return to an average oil production level of 2.26 mmbpd in April alongside an increase in the utilization factor of refineries.

According to Petrobras, the very fluid markets dynamics require continuous monitoring to optimize the management of productive capacity.

It is also worth reminding that Petrobras earlier this month said it would halt operations at 62 platforms located offshore Brazil due to the effects of the coronavirus and the low oil price.

The P-70 FPSO, a unit that will produce at the Atapu field in the Santos Basin, had its anchoring activities completed and the interconnection activities are being concluded. As a result, Petrobras maintains the expectation to start production in the first half of this year. The unit has an oil processing capacity of 150 kbpd and a gas processing capacity of six million scm/d.

Also, the hull of the FPSO P-71 arrived in Espírito Santo in March for integration with the other modules at the Jurong Aracruz Shipyard (EJA) with completion scheduled for 2022.

The Búzios field even reached new production records on March 10, with 640 kbpd and 790 kboed, produced on the four FPSOs currently installed in the field.

The extended well test on Farfan was conducted in the first quarter of the year. The data acquired on the behaviour of the reservoir in production and the characteristics of its oil will be analyzed and will subsidize the development of the field, which is part of the Sergipe Deep Waters project.

As part of its strategy to restore the exploratory portfolio, Petrobras identified the presence of oil in an exploratory well in the Uirapuru block in April.

The block was acquired in the 4th Production Sharing Round in June 2018. Petrobras is the operator of the block and holds a 30 per cent stake. ExxonMobil, Equinor, and Petrogal are its partners with 28, 28, and 14 per cent stakes, respectively.

The company also identified the presence of oil in an exploratory well in the Sudoeste block of Tartaruga Verde. The block was acquired in the 5th Production Sharing Round in September 2018, and Petrobras is the operator and 100 per cent owner.

Petrobras CEO Roberto Castello Branco said: “Oil has been and will be essential for the functioning of the modern economy for a long time. We are strongly committed to promoting Petrobras’ resilience to the global scenario that is extremely hostile to the oil industry.

“Despite the enormous challenges, we are confident that with the dedication and talent of our employees we will achieve this goal. The lessons learned in this crisis will contribute to transforming us into a stronger and more value-generating company”.