Brazilian Production Hits 2M Barrels Per Day

RIO DE JANEIRO – Brazilian state-run energy giant Petroleo Brasileiro, or Petrobras, said late Monday that domestic oil output rose for a third consecutive month in December, though it still fell short of its production target for last year.

Petrobras said that domestic crude oil output rose 3.2% to 2.03 million barrels per day from 1.97 million barrels a day in November. Output from overseas operations averaged 145,158 barrels per day in December, up from 119,300 barrels in November.

Petrobras ended the year with average domestic crude oil production of 1.98 million barrels a day, short of its target of 2.02 million barrels a day despite an upward swing in production in the fourth quarter.

Domestic crude oil production was squeezed throughout 2012 by maintenance shutdowns to overhaul aging offshore platforms and falling recovery rates at mature fields.

Petrobras Chief Executive Maria das Gracas Foster said in the company's earnings release, also released late Monday, the company would probably repeat 2012's crude oil output this year. Additional offshore platform shutdowns for maintenance will limit production in the first half of 2013, Ms. Foster said.

The company, however, expects production to increase in the second half of the year. Petrobras expects six new platforms to start production in 2013, helping build momentum "for the significant increase in production forecast for 2014," Ms. Foster said. The first platform, Cidade de Sao Paulo, started pilot production from the Sapinhoa field in January, Petrobras said.

In December, Petrobras said that increased output from the Cidade de Anchieta floating platform helped boost crude oil production. The platform was installed at the Whales Park subsalt field, one of the deep-water areas where oil was found trapped under a thick layer of salt below the ocean floor, in November.

Efforts to raise recovery rates in the mature Campos Basin offshore region also generated a "positive effect" on output, Petrobras said.

Domestic natural gas output, meanwhile, rose 4.5% month-on-month in December to 64.9 million cubic meters per day, Petrobras said.

Total crude oil and natural gas production was 2.68 million barrels of oil equivalent, or BOE, in December, up from 2.575 million BOE in November, Petrobras said. For the full year, Petrobras averaged crude oil and natural gas production of 2.59 million BOE per day.

Copyright (c) 2012 Dow Jones & Company, Inc.

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