Brazil faces oil output decline after 2030 as new field discoveries plummet, gas imports rise

Brazil's oil and gas self-sufficiency faces threats in the coming decade as new field discoveries plummet and domestic production approaches its peak.

Brazil will increasingly rely on gas imports from Argentina and liquefied natural gas to meet growing demand, according to industry data and executives at Brazil’s state-owned oil producer Petrobras, BNamericas reported.

Commerciality declarations registered with national oil regulator ANP are expected to decline for a second consecutive year in 2025, with only two registered so far: Orca and Sul de Orca, both from Shell's Gato do Mato area in the Santos basin.

That compares with 11 declarations in 2024 and 15 in 2023, and contrasts sharply with the first decade of the 2000s when Brazil recorded as many as 35 declarations in a single year.

"Brazilian production continues to rise until 2029-2031, depending on the scenarios. However, the decline is expected and cannot be avoided," said Marcelo de Assis, a partner at consulting firm MA2Energy, as quoted by BNamericas.

The Energy Research Company expects national oil extraction to peak in 2030 at 5.1mn barrels per day, and gas in 2031 at 316mn cubic metres daily (cmd).

"Brazil's reserves are of gas associated with oil, so gas production will fall along with oil production. In other words, after 2035 we will have to import gas from Argentina or LNG (liquified natural gas)," said De Assis.

The decline reflects delays in granting new areas following creation of a production sharing regime in 2010, which established that only Petrobras could operate pre-salt blocks.

As the state company faced cash constraints during president Dilma Rousseff's 2011-2016 administration, no new pre-salt auctions occurred.

Mahatma dos Santos, technical director of the National Institute for Strategic Studies on Oil and Gas, attributed the drop to reduced exploratory investments over the past decade and declining new well drilling.

Pedro Zalán, founding partner of consultancy ZAG, cited low oil prices around $60 per barrel versus the $80 he considers necessary to stimulate exploration, given the geological complexity in new frontier areas.

Gas imports will remain important in coming years as production from some fields increases while others decline, said Angélica Laureano, Petrobras' executive director of energy transition and sustainability, as quoted by BNamericas.

The country will gain additional domestic supply with the Raia field starting in 2028 and Sergipe Deep Waters phase II in 2030, adding 25mn cmd. The Rota 3 pipeline, operational since 2024, delivers an additional 18mn cmd.

"So far, Rota 3 has been serving to cover the decline of other sources, mainly from Bolivia, which today is supplying between 10mn and 12mn cmd, compared with more than 30mn in the past," Laureano said.