Brazil breaks oil production record

Brazil produced more than 1 billion barrels last year, the first time it has breached the 1-billion-barrel mark, Reuters reports, citing the country’s oil regulator, ANP.

The daily average stood at 3.106 million bpd, up 7.78 percent on 2018, ANP also said.

More than half of the total oil production Brazil recorded in 2019 came from the prolific presalt zone off its coast. The contribution of the presalt zone stood at 633.98 million barrels, which was an annual improvement of 21.56 percent.

Brazil’s crude oil production topped 3 million barrels per day for the first time ever in November 2019, the ANP reported last month, adding that total oil and gas production rose to 3.95 million barrels of oil equivalent daily - also a record-breaking figure.

The strong output result came on the back of ongoing ramp-up of production at eight new floating production, storage, and offloading facilities. The ramp-up added more than 100,000 bpd to the country’s total production between October and November.

The presalt zone has become the center of attention of the Brazilian oil industry now that the government settled its dispute with Petrobras regarding the handling of an area that falls within the zone. The area could hold up to 15 billion barrels of untapped crude, which would double Brazil’s total reserves to 30 billion barrels and make it the world’s fifth-largest oil producer.

Meanwhile, it emerged that Brazil may join OPEC soon, with talks likely to begin in July this year. Brazil’s president is on board with the idea—Jair Bolsonaro said last October that Saudi Arabia had invited Brazil to join the cartel—but the industry is not so enthusiastic.

If the country becomes an OPEC member it would have to comply with production control agreements at a time of rising oil production, and Petrobras plans to further the rise. This could be precisely why OPEC wants Brazil to become a member: according to the group’s production forecasts, Brazil will be the second-largest contributor of non-OPEC production growth this year, after the United States.

This article was originally published on Oilprice.com