A report by a Norway based independent energy research and business Intelligence Company Rystad Energy has said Brazil state-owned is on a pathway to becoming the world’s largest oil producer among publicly listed companies by 2030.
According to Rystad Energy, during the course of 2019, Petrobras has evolved from fifth place to become the third-largest oil producer, reaching an output of around 2.2 million bpd in the third quarter. As it stands, Rosneft and PetroChina top the list over the world’s largest public E&P companies.
“Petrobras can, in a matter of years, become the world’s largest oil producer among publically listed companies. The significance is huge and symbolic,” says Aditya Ravi, vice president of Rystad Energy’s upstream team said in a report. “We predict that Petrobras alone can boost its production numbers by more than 1.3 million barrels per day over the next decade.”
Based on Rystad Energy’s latest forecasts, Petrobras could be poised to overtake PetroChina over the next few months and Rosneft over the next decade, thanks largely to its latest acquisitions.
To develop these and other resources, Brazil is expected to invest $70 billion between 2020 and 2025, solely on-field development. This program will have a monumental effect on Petrobras, says Rystad.
Brazil’s production could be pushed from 2.8 million bpd in 2019 average to over 5.5 million bpd thanks to Petrobras’ potential peak output of almost 3.8 million bpd by 2030.
Brazilian officials recently indicated the country wishes to join Organisation of Petroleum Exporting Countries (OPEC), and Brazil’s current output would make it OPEC’s third-largest producer, behind Saudi Arabia and Iraq.
However, some stakeholders have cautioned Brazil joining OPEC saying the move could cause a major disruption for Brazil, bringing the country into the spotlight with the potential risk of having its wings clipped by the cartel just as production takes off.
Brazil’s biggest-ever oil auctions in November were generally deemed to be disappointing, receiving muted interest from international exploration and production companies. However, national oil company Petrobras gained nearly full control of more than eight billion barrels of oil in the Buzios field, where a sixth floater is being planned.
Reuters reported that Petrobras expects deep offshore areas to account for 88 percent of its exploration and production activities next year, up from 55 percent currently. The company says is maintaining its selective strategy in bid rounds, focusing on world-class deep and ultra-deepwater exploration and production assets.
This casts an uncomfortable on the plan by Nigeria National Petroleum Corporation (NNPC) to list on the Nigeria Stock Exchange (NSE) which is yet to materialise. Other state-owned oil companies like Petrobras which was created in 1953 sold its first shares to the public in December 1957 and is listed on the Brazilian stock market.
If the NNPC lists on the stock exchange it will drive huge capital accumulation allowing market forces to determine oil production, retail price for products and proper deregulation of the downstream oil sector.
Auditing and preparing NNPC’s books for an Initial Public Offering (IPO) also implies revealing the total and current disclosure of reserves capacity, total revenue, profitability, taxes, and other key metrics which are needed in modeling the profitability of NNPC Plc and potential dividend it could pay to investors.
A listed NNPC will lift Nigeria’s oil sector largely in recession and catalyse investments in the oil and gas sector
A listed NNPC means huge gas reserves estimated at 202 trillion cubic feet (TCF) could help feed power generation for energy-starved Nigeria, which remains largely undeveloped 20 plus years after being discovered due to NNPCs inability to either fund the CapEx needed to develop the fields or let go of the fields for private oil firms to develop.
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