Brazil Petrobras Q3 production fell, but sales jumped

RIO DE JANEIRO, BRAZIL – Despite dropping against the average of 2.95 million barrels of oil and natural gas extracted per day in the third quarter last year, production between July and September 2021 grew by 1.2% when compared to the second quarter (2.80 million barrels per day), according to the company’s operational balance released Wednesday (20).

The reduction in production in the annual comparison was attributed to the company’s divestment process, which has sold a number of concessions of little strategic interest but in which it still produced significant volumes.

The majority of concessions sold involve onshore or offshore oil, areas in which production shrank by 28% compared to the third quarter last year.

Growth in production between the second and third quarters was attributed to the entry into operation of the FPSO Carioca offshore platform, which was installed in Sepia, a concession the company operates in pre-salt exploration in the Santos basin’s very deep waters.

According to its balance, Petrobras’ average production in the first 9 months of the year was 2.75 million barrels of oil and natural gas per day, down 3% compared to the first 9 months of last year (2.84 million barrels per day).

Oil production in Brazil in the third quarter reached 2.27 million barrels per day, an increase of 1.9% compared to the second quarter this year and down 4% compared to the same period in 2020.

On the other hand, average natural gas production in the third quarter totaled 520,000 barrels per day, 1.5% less than in the second half of this year and 3.7% less than in the same period last year.

FUEL SALES REACH HIGHEST LEVELS IN SEVERAL YEARS

Despite the drop in oil production, Petrobras’ fuel sales grew significantly in the third quarter due to the high demand in the Brazilian market amid the economic recovery following the crisis triggered by Covid.

According to its balance, Petrobras sold an average of 1.95 million barrels of fuels per day in the third quarter, a 10.6% jump compared to the second quarter and 10.5% compared to the same period last year.

To meet the high demand, the company raised its refinery capacity utilization level from 75% in the second quarter to 85% in the third.

This enabled it to produce 1.93 million barrels per day of fuels at its refineries, 11.0% higher than in the second quarter and virtually unchanged from the same period in 2020.

Gasoline sales totaled 441,000 barrels per day in the third quarter, up 17.9% compared to the same period last year and the highest level since December 2017, while diesel sales reached 867,000 barrels per day, up 15.8% compared to the third quarter of 2020 and the highest level since November 2015.

To meet Brazil’s growing demand for fuels, Petrobras had to raise diesel imports by 548%, to 175,000 barrels per day, and gasoline imports by 950%, to 42,000 barrels per day.

The state-owned oil company, whose shares are traded on the São Paulo, New York and Madrid stock exchanges, acknowledged on Monday that it does not have the capacity to meet the “unusually” high demand for fuel requested by distributors for November.

Petrobras acknowledged that distributors have increased their fuel orders because its prices are lower than those of imports, but urged distributors to increase their imports even if prices are not as competitive.