Displaying items by tag: Petrobras

Despite a global effort in energy transition, Petrobras has expressed no interest to pivot into renewable energy due to lack of expertise. As a leader in Brazil, it must play its part to invest in other less capital-intensive sustainability efforts to reduce emission, says GlobalData, a leading data and analytics company.

The company laid out a comprehensive goal in reducing total operational emission by 25% by 2030. Its sustainability efforts include launching ten commitments to minimise GHG emission, increasing carbon capture and water reutilization, continuing to invest in reducing scope 3 emissions and finding new energy alternatives.

Petrobras has proved a successful track record in reducing carbon intensity since 2017. The majority of the carbon emission originates from the company’s downstream refinery. Some of its main efforts that drives the reduction of emissions in exploration and production and refinery is through reduction of flaring, improving energy transfer efficiency and introduction of carbon reinjection technology.

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Steven Ho, Upstream Oil & Gas Analyst at GlobalData, comments: “Petrobras very much remains bullish in global demand for oil and gas, along with many of its US counterparts. During rosy times, the company invested heavily in many oil and gas fields, resulting in a substantial load of debt. Therefore, the company’s current priority is to leverage on its expertise and increase production from its core assets such as Buzios pre-salt field, while reducing its operational cost to be able to sustain through a lower Brent price given the current volatility.”

Petrobras also plans to ramp up its natural gas production and in further term become a net exporter. The company recently entered a partnership with Golar Power for the development of an LNG distribution business, which displays its intention to expand into the LNG fuel domestic market. Besides that, the company also plans to diversify into LNG liquefaction plant in 2025, which may be the company’s first LNG export-related plan in the future. Petrobras’ effort to incorporate more natural gas and LNG into its production mix will indirectly support its sustainability effort due to the nature of the cleaner fuel which has lower carbon emission.

Steven continues: “Renewable energy projects are capital-intensive and may have longer pay out and are, therefore, deemed unsuited in Petrobras’ vision given its effort to conserve cash to repay debt in the shortest time possible. In fact, the company has recently divested of a wind farm, Eolica Mangue Seco 2. Therefore, the company has to rely heavily on its current initiative to reduce flaring and carbon capture projects to ultimately achieve its sustainability commitments.”

About GlobalData

4,000 of the world’s largest companies, including over 70% of FTSE 100 and 60% of Fortune 100 companies, make more timely and better business decisions thanks to GlobalData’s unique data, expert analysis and innovative solutions, all in one platform. GlobalData’s mission is to help our clients decode the future to be more successful and innovative across a range of industries, including the healthcare, consumer, retail, financial, technology and professional services sectors.

Published in Oil & Gas
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Petróleo Brasileiro S.A.’s (Petrobras) liquids production is expected to grow to 2.7 million barrels per day (mmbd) by 2021. Although in decline, the prolific Roncador field will still drive company’s oil production with over 8.3 percent share of all the production in 2021. Buzios III (Franco) and Buzios I (Franco) will follow with 5.9 percent and 5.5 percent respectively, according to GlobalData, a leading data and analytics company.

By 2021, 309 fields globally will be contributing liquids production to Petrobras, with the expected equity weighted production of over 2.7 mmbd and 24 new oil projects will be responsible for about 1.1 mmbd in 2021. Projects in Brazil will be responsible for 97.7 percent or 2.6 mmbd of production, followed by projects in the US with 1.2 percent (32.5 thousand barrels per day (mbd)) of production in 2021.

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Conventional oil and heavy oil fields will be responsible for 2.6 mmbd of production in 2021, while condensate from conventional gas developments will contribute 16.8 mbd to Petrobras’s liquids production by 2021. Ultra-deepwater fields contribute about 69.3 percent, while deepwater fields contribute around 24.1 percent of the total liquids production. Shallow water and onshore fields contribute about 3.6 and 3.0 percent, respectively.

Petrobras is expected to spend $45.6bn between 2018 and 2021 on conventional and heavy oil projects, with capex peaking in 2018 at $13.1bn. Venezuela is expected to have the highest remaining capex per barrel of oil equivalent (boe) with $58/boe, whereas projects in which Petrobras has participation have low remaining recoverable reserves, as those fields are at the final part of their productive life. The company’s projects in the US are expected to have the lowest average remaining capex per boe at $3.2/boe. The projects in Argentina, Brazil, Bolivia and Nigeria are forecast to have the remaining capex of $6.6, $6.1, $5.6 and $5.3 per boe respectively.

Among the fields in which Petrobras has equity stake, the ultra-deepwater Roncador field in Brazil is the major oil producing field with expected contribution of about 220.2 mbd of oil in 2021. The project has a remaining break-even oil price of $25 per barrel.

Another important field is the ultra-deepwater pre-salt Libra Noroeste (Mero) project, which will contribute approximately 39.1 mbd of oil to Petrobras by 2021. The company’s share of remaining recoverable oil reserves from the field total 643 million barrels of oil. Libra Noroeste (Mero) has a remaining break-even oil price of $35 per barrel.

Buzios III (Franco) also in Brazil is one of the major ultra-deepwater oil producing fields, which is expected to contribute around 156.5 mbd of oil in 2021 with the remaining break-even of $23 per barrel of oil.

Another ultra-deepwater oil producing Buzios I (Franco) field in Brazil is expected to contribute about 146.5 mbd of oil by 2021 with the remaining break-even oil price of $32 per barrel.

About GlobalData

4,000 of the world’s largest companies, including over 70% of FTSE 100 and 60% of Fortune 100 companies, make more timely and better business decisions thanks to GlobalData’s unique data, expert analysis and innovative solutions, all in one platform. GlobalData’s mission is to help our clients decode the future to be more successful and innovative across a range of industries, including the healthcare, consumer, retail, financial, technology and professional services sectors.

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