Production at Brazil’s Petrobras Falls

Reuters, July 21, 2022

Oil production at Brazil's Petrobras fell in the second quarter as asset divestments and increased work stoppages took their toll, while the company's refinery utilization rate hit a whopping 97%.

In a securities filing, Petroleo Brasileiro SA (PETR4.SA), as the state-run firm is formally known, said crude production came to 2.114 million barrels per day, down 5.2% from the previous quarter and 5% from the same period a year ago.

Including natural gas, the company produced 2.653 million barrels of oil equivalent per day (boepd), down 5.1% in both quarterly and annual terms.

In comments accompanying the results, Petrobras attributed the decline to the sale of 10% of its Sepia and Atapu fields to a pair of Chinese state-run companies, China National Offshore Oil Corp and China National Offshore Development Corp. The company also completed a smaller divestment to Brazilian oil independent 3R Petroleo Oleo e Gas SA (RRRP3.SA).

Second quarter production was also affected by an increase in maintenance stoppages, Petrobras said.

The company characterized the production decline as in line with expectations, and said it was not revising its 2022 production guidance of roughly 2.6 million boepd.

Two major platforms, the P-68 and the Carioca FPSO, continued to ramp up, while the Guanabara FPSO came online.

Refinery utilization rates came in at 89%, up 2% in quarterly terms and 14% in annual terms. Its refineries were running nearly full tilt, at 97%, at the end of June.

Petrobras warned there would be a significant number of planned stoppages at its refineries in the second half of the year, particularly during the fourth quarter.

Reporting by Gram Slattery in Rio de Janeiro and Peter Siqueira in Sao Paulo; Editing by Sandra Maler and Richard Pullin

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