ANP head comments on projected pace of Brazil’s oil production increase

Rodolfo Saboia, the director-general of Brazil’s National Agency of Petroleum, Natural Gas and Biofuels (ANP), said last week that his country was on track to raise its hydrocarbon production by 3mn barrels of oil equivalent per day (boepd) by the end of the decade but could not speed up the rate of increase to make up for the removal of Russian crude from the market.

“Production will grow, but there isn’t much that can be done to accelerate it,” he told Reuters. “There is [only] so much the industry can deliver.” He was speaking after US Energy Secretary Jennifer Granholm asked Brazil’s Mining and Energy Minister Bento Albuquerque for help in making more oil available for sale on the global market.

Saboia was not the only Brazilian industry figure to make this point. João Henrique Rittershaussen, the head of production at the national oil company (NOC) Petrobras, told Reuters that it took time to bring new production capacity on stream.

For example, Rittershaussen noted, Petrobras is slated to launch 15 new offshore production platforms capable of extracting 2.425mn barrels per day (bpd) of oil by 2026. However, only one of these is due to begin operating before the end of 2022, he said, and it will only be able to handle 180,000 bpd, or 7.42% of the total. Another five platforms with a capacity of 630,000 bpd, or about 26% of the total, will follow suit in 2023, he stated.

He also stressed, though, that it would take time to bring these units up to their full design capacity. “It takes almost an entire year to reach full capacity in a platform like this,” Reuters quoted him as saying.

Fernanda Delgado, the executive director of the Brazilian Petroleum and Gas Institute (IBP), also emphasised the need for taking the time to bring new facilities up to full capacity. “This is just not an instant process,” she told the news agency.”

Albuquerque had said last week that oil companies operating within Brazil would seek to ramp up their production in an effort to compensate for the rise in crude prices that followed the Russian invasion of Ukraine.

Among the companies that are reportedly looking to expand production are state-owned Petrobras, the largest oil producer in the country, as well as Equinor (Norway), Galp (Portugal), Shell (UK) and TotalEnergies (France).

Albuquerque said that while he was unable to confirm the exact extent of the increase that each firm might effect, he remained confident of the companies’ intentions. “All of them want to do it,” he stated. “The companies have signalled [their intention to increase production this year], not out of good will, but because the market is attractive.”

Currently, Brazil is one of the leading oil producers worldwide. It extracted just below 4mn boepd of crude on average in 2021 and may see yields reach 7mn boepd by the end of the decade. Petrobras has already begun boosting production levels, focusing on increasing output at its rich deepwater and ultra-deepwater deposits located in the offshore Campos and Santos basins.

Russia is the world’s third-biggest crude producer behind the US and Saudi Arabia. As such, its conflict with Ukraine has resulted in an array of sanctions being enforced on the oil powerhouse, thereby causing major disruptions to worldwide oil supplies.

In a recent announcement, the International Energy Agency (IEA) said Russia’s invasion of Ukraine was causing a supply shortage that could potentially slow world economic growth while raising oil and gas prices. For that reason, the IEA called for an increase in energy output in other world regions in order to curtail this threat.