DW: Brazil will need to drill 300 wells to reach production target

FPSO Cidade de Ilhabela
FPSO Cidade de Ilhabela

Petrobras has long been a pioneer in the adoption and deployment of deepwater technology. This has enabled them to build huge reserves of some 16 billion barrels of oil, Douglas-Westwood, an energy intelligence group, said in its DW Monday report.

Converting these reserves to production, however, is another matter and Petrobras has a history of setting ambitious targets, with a poor record of meeting them, DW continued in its report.

The long delayed ‘2015-2019 Business and Management Plan’ released last week is a reflection of the new reality for Petrobras. With collapsed oil prices and unfavourable exchange rates, Petrobras has slashed their expenditure plans by 40% from the plans announced a year ago. Recognising the upstream challenges, the company is now allocating 84% of its budget to E&P compared to 70% in the previous plan. The biggest cut goes to their refining and supply sector which has seen its budget reduced by 67% compared to last year’s plan.

Production decline from existing fields is a huge challenge with around 200,000 bpd of capacity eroded each year. Brazil’s huge deepwater potential remains constrained with Petrobras having to revise their production target for 2020, which now forecasts domestic oil output to increase to 2.8 million barrels per day – 40% lower than its projection 12 months ago.

Douglas-Westwood predicts that over the forecast period, Brazil will need to drill around 300 development wells in deepwater, in order to sustain and reach its production target. However, of the 29 new rigs being built by the company, many are under threat from either funding problems or yards withdrawing from the contracts.

Douglas-Westwood had already taken a conservative position on Brazil and the cut in production target now brings in line Petrobras’ expectations and Douglas-Westwood’s own ‘DW D&P’ forecast.

DW concluded that the scale and importance of Brazil in the overall offshore sector means that the impact of the latest spending revisions will be felt throughout the oilfield service industry supply-chain.

Share this article

Follow Offshore Energy Today

Events>

<< Oct 2019 >>
MTWTFSS
30 1 2 3 4 5 6
7 8 9 10 11 12 13
14 15 16 17 18 19 20
21 22 23 24 25 26 27
28 29 30 31 1 2 3

Executive Oil Conference & Expo 2019

Executive Oil Conference and Exhibition is a unique opportunity to meet with all of the region’s…

read more >

Oil & Gas Vietnam 2019

Oil & Gas Vietnam (OGAV) 2019 is the only specialized oil & gas event in Vietnam that brings together an international congregation of both upstream and downstream oil and gas companies and also its supporting industries gathered in the heart of Vietnam’s oil and gas industry in Vung Tau, to showcase the latest developments in the oil and gas industry.

read more >

Jobs>

Looking to fill a job opening?

By advertising your job here, on the homepage of OffshoreEnergyToday.com, you'll reach countless professionals in the sector. For more information, click below...

apply

Looking to fill a job opening?

By advertising your job here, on the homepage of OffshoreEnergyToday.com, you'll reach countless professionals in the sector. For more information, click below...

apply