22 C
Georgetown
Sunday, January 17, 2021

Brazil + OPEC forever? Hold off on those wedding invites says Rystad Energy

Must Read

Oil price projections remain uncertain, Guyana already warned not to spend what it doesn’t have

Extreme price volatility has been a key feature of the oil industry and can have a major impact on...

Let local content policy be responsive to conditions on the ground, expert urges

Guyana has just entered its second year as an oil producing country and the question of how to maximize...

Halliburton delivers industry’s first successful grid-powered fracturing operation

Halliburton Company said on Thursday it has successfully deployed the industry’s first electric grid-powered fracturing operation. The job, being...
OilNOW
OilNow is an online-based Information and Resource Centre which serves to complement the work of all stakeholders in the oil and gas sector in Guyana.

At an October forum in Saudi Arabia, Brazil’s president Jair Bolsonaro suggested that he would like to see Brazil join OPEC. If such a marriage were to come to fruition, OPEC would be the clear winner and Brazil the loser by a long shot, energy research and business intelligence company Rystad Energy said in November 29 report.

Brazil has experienced a tremendous spurt in crude oil production, propelled by the development of its pre-salt resources. However, taking Brazil’s oil production to its current level certainly didn’t come cheap.

Rystad Energy said Petrobras has paid over 78% of Brazil’s $396 billion bill for exploration (excluding dry well costs), development and operations from 2010 to 2018. This, in 2014, made Petrobras the world’s most indebted listed E&P company. Petrobras would be counting on the revenues from its growing production to help scale its debt mountain.

OPEC-mandated production cuts at its projects would threaten Petrobras’ attempts to reduce gearing. Petrobras doesn’t need OPEC — it needs to reduce its still substantial debt, the intelligence company said. “The established players with activities in Brazil don’t need OPEC — they seek returns on already considerable investments incurred. The new entrants nibbling at Petrobras’ divestment clusters don’t need OPEC — they want to stabilize and even grow production at their acquisitions. The oilfield service industry doesn’t need OPEC — it would rather have increased production levels to ensure more business.”

Brazil has been invited to join OPEC previously also; then the government stated that under Brazilian law it can’t interfere with production operations. So even the Brazilian government doesn’t really need OPEC. Rystad Energy said, pointing out that no one in Brazil appears keen on the OPEC diet.

Latest News

Oil price projections remain uncertain, Guyana already warned not to spend what it doesn’t have

Extreme price volatility has been a key feature of the oil industry and can have a major impact on...

Let local content policy be responsive to conditions on the ground, expert urges

Guyana has just entered its second year as an oil producing country and the question of how to maximize benefits for the local population...

Halliburton delivers industry’s first successful grid-powered fracturing operation

Halliburton Company said on Thursday it has successfully deployed the industry’s first electric grid-powered fracturing operation. The job, being performed on several pads for...

Exxon has made 18 commercial discoveries out of 22 exploration wells drilled in Guyana

The success rate for finding commercial quantities of hydrocarbons offshore Guyana remains one of the highest in the oil and gas industry. Supported by...

Company planning to use recycled oil waste for production of bitumen, liquid mud

Oilfield Waste Management Services (OWMS) plans to construct a thermal desorption waste treatment plant in Guyana to support the growing oil exploration activities offshore...

More Articles Like This