Discoveries in Brazil’s pre-salt reservoirs are set to become the biggest offshore oil projects in the world, having already yielded 27bn barrels of oil since 2006, a new report from Wood Mackenzie has said.
The research paper said there are concerns over Petrobras’s ability to bring much of the planned pre-salt onstream.
“But, despite lowering our forecast production for Brazil, we expect these mega-projects to produce 3.2mn barrels of oil per day (b/d) by 2025 –78% of the country’s total production,” said Wood Mackenzie.
“Crude quality is strikingly similar to that expected from Norway’s Johan Sverdrup field – relatively heavy and sweet, averaging 28° API – with production due to peak at over 600,000 b/d in 2024.”
These mega-projects are expected to increase the supply of heavier crude from the Atlantic basin by 3.8 million b/d before 2025, heralding a major change in the quality of crude supply and potentially triggering changes in refinery configuration in Europe and beyond to maximise their value capture.
“As new supply from North America fills US refineries, we expect Brazilian pre-salt crude will target Europe, competing with Johan Sverdrup which will dominate North Sea production after 2020,” said the paper
“Johan Sverdrup’s lower shipping costs should make its crude more attractive to refiners in northern Europe but demand for heavier oil there will remain limited, pushing some cargoes into the Mediterranean when the field is at peak production.
“Consequently, we believe that by 2025 over 1 million b/d pre-salt crude will be refined by those Asian markets currently under-served by heavy crude and forecast that demand in the region will rise rapidly in the long-term.
“These offshore mega-projects are expected to trade at a 3-4% price discount to Brent, yet more assay data will refine future estimates of crude prices, product yields and refining margins.”
