(Bloomberg) – Petrobras will continue expanding production at the world’s biggest oil field this year while avoiding cost inflation as it advances deep-water projects.
A floating production and storage vessel known as the P-78 will reach first oil at the Buzios field in December, Renata Baruzzi, the head of engineering and technology, said during a call with analysts. The vessel arrived in Brazil in late September and has the capacity to produce 180,000 bpd.
The ramp up at Buzios and other fields brought Petrobras’s total oil production to 2.6 MMbpd in October, up from an average of 5.2 million barrels a day in the third quarter, said Sylvia Anjos, the head of exploration and production. Petrobras has also expanded capacity at existing production vessels by 115,000 bpd, helping the company to report higher-than-expected profits in the third quarter.
“Buzios is a spectacular reservoir,” Anjos said during the conference call. “The rock and cavity structures” allow the field to “produce more than we expected.”
Buzios is part of the pre-salt basin that 18 years ago made Brazil one of the world’s oil hottest oil regions, and is now Petrobras’ last big growth engine. Its rapid development has allowed the nation to increase production more than any other non-OPEC country apart from the US in the past year and provided Petrobras with a crucial source of revenue as it hunts for the next big discovery.
Petroleo Brasileiro SA, as it is formally known, is delivering projects ahead of schedule and within its budget, Chief Financial Officer Fernando Melgarejo said during the call. Individual projects are often getting completed faster than expected but within budget, helping to avoid cost increases, he added.
The company dedicated 85% of its capital expenditures on exploration and production during the third quarter, Melgarejo said. Still, the company is adjusting to lower oil prices and could postpone some investments, he said.
Petrobras is unlikely to pay out extraordinary dividends this year due to the impact of low oil prices, he said during a call with journalists.
