Crude oil and natural gas production in South America is likely to remain fairly flat over the next five years, slightly increasing to roughly 11.7 million barrels of oil-equivalent per day (MMBOE/d) by 2025, Rystad said Tuesday.
The lone English speaking country on the continent – Guyana – will be a new source of significant production in coming years.
Rystad; a consulting/analytics company, said the reason for the relative stagnation is that growth in Brazil is being partially offset by declines in Venezuela, Argentina, Colombia and elsewhere. The major problem for South American supply, though, is without doubt Venezuela.
Supply is forecast to reach the level of 2016 by 2025, due to new Brazilian oilfields coming online towards 2020. Last year, the region’s output averaged 11.22 MMBOE/d. In 2018, the volume is forecast to drop to 11.1 MMBOE/d, the analysts said.
Brazilian production is set to grow at rate of 9% per year during the 2017-2020 period, mainly thanks to the short- and medium-term start-up of fields, which were sanctioned before the oil price collapse, Kallanish Energy learns.
From being the largest producer, Venezuela has now sunk to being the largest contributor to decreasing production in the region. Output has plummeted from 3.62 MMBOE/d in 2013, to 2.9 MMBOE/d in 2017, Rystad said.
“The country’s output is forecast to continue to decline towards the early 2020s, before flattening out at the level of 2.3-2.4 MMBOE/d,” the note said.
But the region’s supply problems aren’t exclusive to Caracas, and will also come from other countries such as Trinidad and Tobago, Argentina, or Colombia. The latter two countries, in particular, are estimated to see annual decline rates of 10-20% in fields such as Loma de la Lata and Rubiales-Piriri.
A new source of supply growth post 2020s will be Guyana, considered today as the “hot spot” for new oil exploration. Oil production is expected to hit around 500,000 barrels per day by 2023 via multiple developments being undertaken by US oil major, ExxonMobil. Additionally, several other companies are undertaking their own search for oil in the Guyana basin where to date some 3.2 billion barrels have already been found.