Brazilian oil production was already above last year's average by August

Oil companies are acclimating to the tough technological conditions needed in the pre-salt fields off the nation's coast.
By Daniel J. Graeber  |  Dec. 14, 2017 at 9:47 AM
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Dec. 14 (UPI) -- Data through August for Brazil show oil production was already 3 percent above the full-year average from 2016, a country profile revealed.

In a country profile, the U.S. Energy Information Administration said Brazil through August produced an average of 3.3 million barrels per day in oil and other petroleum liquids. That's up from the full-year 2016 average of 3.2 million barrels per day.

Much of the oil from the offshore Santos basin is buried underneath a thick layer of salt on the ocean floor and producers have been able to crack into that in recent years. Output from pre-salt basins has accelerated since 2009 as exploration and production technology acclimates to the region's tough conditions.

"Brazil's pre-salt oil production in 2016 reached a record 1.02 million barrels per day, surpassing the 2015 production level by 33 percent," EIA's report read.

U.S. supermajor Chevron opted to halt production briefly five years ago at the offshore Frade field after discovering a small seep of oil, a decision that followed a government announcement of plans to impose a $27.7 million fine for an earlier release.

Five years later, French supermajor Total announced production started at the Libra field off the coast of Brazil.

Using a floating production, storage and offloading vessel, Total said early capacity from Libra is around 50,000 barrels per day. From the pre-salt Santos basin, the company said Libra is part of its strategy of investing in new competitive projects with low break-even costs.

Brazil ranks second behind Venezuela in terms of proven oil reserves in South America. Libra alone holds between 8 billion and 12 billion barrels of recoverable reserves.

The Brazilian economy during the third quarter posted a 1.4 percent increase in year-over-year gross domestic product, its strongest pace since the beginning of 2014. GDP is expected to accelerate 1.5 percent next year.

Outside of the Organization of Petroleum Exporting Countries, the United States is the main driver in production gains. Brazil is the third-largest non-OPEC contributor behind Canada with 180,000 barrels per day of production expected in average growth for the year, according to OPEC economists.

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