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GlobalData sees South America overtaking

North America on oil production

AMERICAS THE combination of Guyana’s new oilfields and 2024 from projects such as Liza-2.”
output from Brazil’s pre-salt region could help Upstream operators are treating South Amer-
push South America’s oil output beyond that of ican projects as good investment prospects,
North America within four years, according to even though global oil markets remain relatively
new research. weak, with Brent selling for about $40 per barrel,
“Despite the effects of COVID-19 [the coro- GlobalData said. Break-even prices for Brazil’s
navirus pandemic] on global demand and sup- pre-salt region are running as low as low as $35
ply, the outlook for South America’s offshore per barrel, while some ultra-deepwater projects
production is on track to surpass volumes com- in the frontier Guyana-Suriname Basin have
ing from North America by 2024,” the consul- break-even oil prices of no more than $23 per
tancy GlobalData said in a statement. barrel, it said. For the Americas
For the Americas as a whole, oil production The consultancy also pointed out that final
is on track to increase steadily from the expected investment decisions (FIDs) had been taken as a whole, oil
level of 8.65mn barrels per day (bpd) in 2020 recently on several projects in Brazil and Guy-
to 9.15mn bpd in 2024. This is largely due to ana, meaning that work at these fields is less production is on
positive trends in South America, particularly likely to be postponed or suspended than it is at
the expansion of development work in Brazil’s sites in North America, GlobalData said. It also track to increase
pre-salt area and the launch of newcomer Guy- pointed out that the pandemic had delayed sev- steadily.
ana’s ultra-deepwater projects, the firm said in eral key projects off the coast of the US.
research published on its website. “Delays and pending approvals will not help
“Brazil’s prolific pre-salt region is sur- North America reverse its declining trajectory,
viving the industry downturn, mainly due as production is expected to drop by 15% over
to the robust economics of its current and a period of 2022-2024,” said Effuah Alleyne, a
upcoming projects – a result of high-produc- senior analyst at GlobalData. “Improving the
tivity, high-quality crude wells,” it said. It also region’s trend will require a combination of fac-
pointed out that Brazil’s national oil company tors not exclusive to better market pricing to sup-
(NOC) Petrobras had steadily streamlined its port project economics, enhanced recovery for
portfolio to focus on exploration and produc- existing projects and the expansion of resource
tion activities in the pre-salt layer, while divest- base especially in Mexico,” she added.
ing non-core assets in onshore, shallow-water Expanding pipeline infrastructure could also
and post-salt areas. help in the US and Canada, Alleyne said. Both
At the same time, it added, Guyana’s “short- countries have experienced pipeline bottlenecks,
term production [is] expected to grow 10-fold by she noted.™

P14 www. NEWSBASE .com Week 47 26•November•2020