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A Petrobras (PETR3; PETR4) revised the production cut scheduled for April after seeing better-than-expected demand for its products, especially those exported, the oil company said Monday, despite the global scenario of contraction in consumption due to the new coronavirus.
The company had announced on the last day 7 a production cut of oil of approximately 200 thousand barrels per day (bpd), establishing a pumping level of 2.07 million bpd for April, compared to an average of 2,394 million bpd recorded in the last quarter of 2019.
But, in a production report on Monday, it showed an average production in April of about 2.26 million barrels per day, 20 days after announcing cuts to accommodate a time of lower demand for the coronavirus.
“With the evolution of demand for our products showing better than expected, we opted for the gradual return to an average oil production level of 2.26 million bpd in April accompanied by an increase in the utilization factor of refining capacity “the company said in its quarterly production bulletin.
More refinement
The company said it had previously planned to reduce the utilization factor of the refineries from 79% to 60%. But it did not report the new utilization factor for its refineries.
In a newsletter on Monday night, the Ministry of Mines and Energy reported that the refinery’s utilization factor, which was below 55% for most of the first half of the month, had risen to more than 60% on Sunday.
The company also recalled that it hibernated 62 platforms in shallow water fields that are in the process of being disinvested. And he informed that the actions “have allowed the maintenance of a reasonable authorization in the storage capacity, consequently avoiding the adoption of costly measures such as the freight of ships to store liquids.”
The April production overhaul, however, occurs as the oil company has benefited from sales of marine fuel (“bunker”) and fuel oil, after new international market rules require lower sulfur rates, which they can be obtained with less cost from the company with pre-salt oil.
Fuel oil production, mainly from fuel chains and low sulfur fuel oil, reached an average of 295 thousand bpd in the first quarter, an increase of 18.5% in relation to the production in the fourth quarter.
Remember
In February, the company broke the record for fuel oil exports, reaching the mark of 238 thousand bpd, mainly destined for the Asian market.
“Although there is a drop in global demand, the competitive advantage of our products, the gradual resumption of China, a strong trading partner and the constant search for new markets for our products, they expect us to continue to perform well in our exports.” he declared.
The oil company also pointed out that, as of April, with the drop in demand in the domestic market, the company has directed efforts towards the export of oil and oil products. To this end, the company is working on logistics actions that allow for the expansion of export capacity.
The company also reiterated that, as a result of the coronavirus prevention actions on the platforms, it decided to review the schedule of maintenance stops planned for the second quarter, postponing them for the second half.
The state company also commented that, despite these delays resulting from Covid-19, it maintained the forecast of the negative impact of these shutdowns at 200,000 barrels per day on production for the year.
Amid a change in forecasts for April, the company did not meet a new production target for the year.
In response to Reuters, the company noted that “the scenario is still uncertain for Petrobras to express itself on this matter.”
In addition, the company also maintained the expectation of starting production on the P-70 platform, in the Atapu field, in the pre-salt of the Santos Basin, in the first half.
First trimester
Petrobras’ total oil, LNG and natural gas production totaled 2,909 million barrels of oil equivalent per day (boed) in the first quarter, 14.6% more than in the same period last year, with the impact of the commissioning of seven new platforms between 2018 and 2019, in the important fields of Búzios, Lula and Berbigão / Sururu (P-68).
Compared to the last three months of 2019, the oil company’s total production fell 3.8%, mainly due to the sale of assets.
The company’s oil and LGN production in Brazil, in turn, reached 2.32 million barrels per day (bpd), 17.7% more than in the same period last year and 3.1 % less compared to the fourth quarter of 2019.
