Petrobras sees oil reserves drop in 2020

Brazilian oil major Petrobras has noted a small decrease in its proved reserves of oil, condensate, and natural gas for 2020 when compared to figures from the year before.

Petrobras said that it had an estimated 8.816 billion barrels of oil equivalent (boe) of proved reserves as of 31 December 2020, according to U.S. Securities and Exchange Commission regulations. Oil and condensate, and natural gas correspond to 86 and 14 per cent of this total, respectively.

Information provided by Reuters suggests that the 8.816 billion boe is a drop of around 8 per cent from the year before.

In 2020, Petrobras booked new reserves related to the approval of new projects and the good performance of reservoirs, especially in Santos Basin pre-salt, resulting in an appropriation equivalent to 101 per cent of the year’s production. This effect was partially offset by the reduction of oil prices by 32 per cent in 2020, used as future prices, according to SEC regulation.

The company said its replacement rate was 29 per cent of last year’s production, adding the impact of asset sales, totalling an equivalent 117 million barrels of oil equivalent, was not relevant in the total value of reserves.

Petrobras noted that the asset sales in 2020 were aligned with the maximisation of portfolio value, focused on ‘world-class’ deepwater and ultra-deepwater assets, and their impact was not relevant to the total volume of reserves.

The 2020 reserves still do not consider new projects to be implemented as the result of the acquisition of the transfer of rights surplus. These volumes will be considered after signing the co-participation agreements for Búzios and Itapu fields.

Petrobras historically submits at least 90 per cent of its proved reserves to independent evaluation according to SEC definitions. The company also estimates reserves according to the definitions of the National Agency of Petroleum, Natural Gas and Biofuels and the Society of Petroleum Engineers (ANP/SPE). On 31 December 2020, proved reserves according to those definitions reached 9.427 billion barrels of oil equivalent.

The differences between the reserves estimated by ANP/SPE definitions and those estimated using SEC regulation are mainly due to different economic assumptions and to the possibility of considering as reserves those quantities forecasted to be produced after concession contract expiration in fields in Brazil according to ANP reserves regulation.

But, despite a lower reserves number at the end of the year, Petrobras Petrobras registered records in its 2020 annual oil production and total annual production of oil and gas.

Namely, the company produced 2.28 million barrels per day (bpd) of oil and 2.84 million barrels of oil equivalent per day (boed).