Brazilian Mid-Caps To Increase Mature Asset Reserves By 1Bn

With Petrobras divesting many of its mature assets, new mid-cap upstream operators entering the Brazilian market will invest $10 billion in capital investments during the next decade.

Wood Mackenzie said that this would boost the production from these assets through 2027 and increase remaining reserves by 980 million barrels of oil equivalent by 2035.

“For several years, Petrobras has pulled back on its investments in mature assets, which has provided an opportunity for mid-cap operators to renew drilling in these areas and develop more efficient production operations,” said Amanda Bandeira, Latin America Upstream analyst for Wood Mackenzie. "This will boost output and reserves significantly for the next decade."

“We will see a significant shift in Brazil’s production makeup. In 2015, Petrobras held 84% of all production. That level will drop to 61% by 2030, as the Majors and the independent operators’ output grows,” added Bandeira.

Woodmac’s report, ‘The rise of independent operators in Brazil’, forecasts oil and gas production from these companies to peak at 485,000 boe/d by 2027, before the asset maturity overtakes development activity and output begins to decline.

Companies in this study included are 3R Petroleum, BW Energy, Enauta, Eneva, Grupo Cobra, Karoon Energy, Origem Energia, Perenco, PetroReconcavo, Prio, Seacrest Capital, and Trident Energy.

“While we will see growth for these companies in the near-term, resources are finite, and they will have to adjust to new strategies once these mature assets are no longer productive”

“We already see some moves to bolster the longer-term outlooks through M&A and exploration. Late-life asset optimization will also be a focus, to maximize the operational life of their mature asset portfolios. Some will be better positioned than others,” said Vinicius Diniz Moraes, Latin America Upstream analyst for Wood Mackenzie.

It is worth noting that the report focused on companies producing above 5,000 boe/d in Brazil, excluding Petrobras and international Majors. 

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