Petrobras narrows crude trade balance

OREANDA-NEWS. May 14, 2015. Brazil state-controlled Petrobras expects crude exports to jump by more than 50pc this year to around 350,000 b/d, compared with 230,000 b/d in 2014, despite a slowdown in domestic production growth, crude manager Fernando Colares said today at the Argus Rio Oil conference.

Petrobras still relies on around 370,000 of imports of lighter crude to mix with its heavy Campos basin crude, so the firm remains a net importer.

The uptick in crude exports reflects a decrease in domestic demand and increased appetite in Asia, led by stockpile demand in China.

"We are exporting more oil to China and less oil to the US, which, despite being an interesting market for Petrobras' exports, is being diminished by high local production. The trend is to have Asia as a destination, especially India and China," Colares said.

Supply will be met mainly from a ramp up medium-grade crude production from subsalt fields in the Santos basin.

The company projects that its domestic crude production will grow by 4.5pc year-on-year to 2.121mn b/d. Output in 2016 is expected to inch up to just 2.185mn b/d next year, down from an original target of 2.5mn b/d.

Production estimates beyond 2016 will be revealed in the company?s new 2015-19 business plan to be published next month. But a 2020 domestic production target of 4.2mn b/d is now believed to be out of reach because of investment cutbacks.

Subsalt production is the main growth driver. Petrobras said yesterday that subsalt flows from the Campos and Santos basins surpassed a record 800,000 b/d on 11 April.

The recently installed Dynamic Producer early production system in the B?zios subsalt field provided about 15,000 b/d to the record production.

Around 74pc of the subsalt oil production belongs to Petrobras, with the remainder shared mainly among the UK's BG, Spanish-Chinese joint venture Repsol-Sinopec, and Portugal's Galp.

Subsalt oil accounts for around 25pc of Petrobras? domestic oil production, and is expected to jump to more than 50pc by 2018.