05/25/2017 15h09

Brazil oil exports reach record in Q1

Valor International

Brazilian oil exports surpassed this year the 1 million barrels per day threshold in a month for the first time since December 2010, when they had totaled 1.27 million b/d. According to data from the National Petroleum Agency (ANP), between January and March crude exports reached the highest quarterly average in history: 1.23 million barrels per day, rising 56% year-over-year.

In February, 1.55 million barrels of crude oil were exported per day, the highest monthly average on the ANP's record, which began in 2000.

Helder Queiroz, a researcher at the Federal University of Rio de Janeiro (UFRJ) and former ANP director, said two facts can explain the jump in Brazilian exports. The first is the recession, which means Petrobras processes less oil at Brazilian refineries, reflecting the declining domestic demand. According to the ANP, the country's fuel market contracted 4.5% in 2016. The second is that the state-owned company may be importing oil products at attractive prices to sell in the local market with a premium, which boosts the availability of crude for exports.

Jorge Celestino

This month, the company's refining and gas officer, Jorge Celestino, had already said that the increase in oil exports was a structural move. "Petrobras has increasingly become a net oil exporter."

Petrobras accounts for 46% of Brazilian oil exports. Most of the shipments are carried out mainly by multinationals — Shell, Statoil, Petrogal and Chevron are some of the companies that are authorized by the ANP to export their production.

In the first quarter, Petrobras exported 609,000 barrels of oil per day, almost twice as much as in the same period in 2016. In the same comparison, the oil giant’s net exports almost quintupled, to 516,000 b/d from 108,000 b/d.

On Wednesday, Petrobras executive manager for marketing and trade, Guilherme França, said the company expects to increase its average of crude exports by 30% this year, to 503,000 b/d. For 2021, Petrobras’s target is to reach 742,000 b/d in shipments abroad.

Present at the Argus event, Shell's vice president for marketing and supply of crude oil, Mike Muller, said he also thinks Brazil is on a "significant" growth trajectory in oil exports and has become key for the global market, outside of OPEC.

"Brazil is on a growth path, the pre-salt is very competitive, because the Santos Basin has been blessed by nature. Geology is not everything, but it is a starting point when considering the production cost," Mr. Muller said.

José Mauro Coelho, director for oil and gas at state-run Energy Research Company (EPE), expects Brazilian production to reach 5 million b/d by 2026, which makes room for the country to export between 1.5 million b/d and 2 million b/d.

Considering Brazil's gross crude oil export average in the first quarter and total export sales by major exporters in 2015 (most recent available data), Brazil would rank 12th, behind Norway.

In an article published on blog Infopetro, Mr. Queiroz says “Brazil is still a crude oil importer given the features of its refining park and the resulting necessity of processing a mix of light and heavy oil. However, since the processed load has been declining, net exports have been showing very significant volumes and an exporting position that it’s consolidating little by little in the international market.”