Latin America Oil Supply in April 2015

Source: OPEC 4/28/2015, Location: South America

Latin Americaís oil supply is estimated to have grown by 0.26 mb/d to average 5.04 mb/d in 2014, revised up by 10 tb/d from the last MOMR. Latin America is another main driver of growth among all the non-OPEC regions. It is seen that Argentina, Brazil and Latin America others contributed to growth in 2014, while output from Colombia is likely to experience a decline of 20 tb/d in 2014 to average 1.01 mb/d, unchanged from the last estimation. Total liquids output in Argentina was revised up this month by 20 tb/d, resulting from upward revisions in biofuels production during all quarters of 2013 and 2014. On a quarterly basis, Latin Americaís supply in 2014 is expected to stand at 4.86 mb/d, 4.92 mb/d, 5.10 mb/d and 5.23 mb/d, respectively.

Latin Americaís oil supply is forecast to grow by 0.08 mb/d to average 5.12 mb/d in 2015, revised up by 20 tb/d from the last MOMR. However, the oil supply in Argentina was revised down by 10 tb/d. On the other hand, the proposed production from Colombia and Brazil was revised up by 20 and 10 tb/d, respectively. Latin America will be another main driver of growth among all the non-OPEC regions in 2015. The y-o-y growth in 1Q15 is estimated at 400 tb/d, but the q-o-q growth stands at 40 tb/d. On a quarterly basis, Latin Americaís supply in 2015 is expected to stand at 5.28 mb/d, 5.12 mb/d, 5.10 mb/d and 4.99 mb/d, respectively.

Brazilís annual liquids supply growth in 2015 is set to slow to 0.16 mb/d this year, down from 0.26 mb/d in 2014. This indicates an upward revision by 10 tb/d to 3.06 mb/d. Liquids production in Brazil in 1Q15 increased q-o-q by 20 tb/d to 3.10 mb/d, although crude oil production fell seasonally m-o-m by 40 tb/d to 2.53 mb/d in February and for the second consecutive month as maintenance continued at the P-58 platform. Oil output was also lower at the Lula (Brazilís second largest) and Marlim (Brazilís fourth largest) fields. Moreover, it is expected that the declining trend will continue in March as the 0.1 mb/d P-58 platform was shut down due to safety concerns. Therefore, while 1Q15 will still register impressive y-o-y growth of 0.38 mb/d supported by record high pre-salt production, which hit 0.74 mb/d in February, production growth from 2Q15 will likely slow towards the end of the year.

Petrobras has started up the P-61 tension-leg platform at the Papa Terra field on the southern tip of the Campos basin, 110 km offshore Brazil. Thirteen production wells will be interconnected to P-61, and production from P-61 is transferred via flexible lines to P-63, which is capable of processing 140 tb/d of oil and 1 mcm of gas, as well as injecting 340 thousand barrels of water. The presence of reservoirs with 14-17į gravity oil and the projectís large water depths have made the development of the Papa-Terra field one of Petrobrasís most complex projects, According to the exploration news announced by Petrobras, a large column of crude oil was discovered in the second extension well at the subsalt Libra Field in late March 2015. The C1 well, which was drilled in the Santos Basin about 220 kilometres off Rio de Janeiro state, is about 18 kilometres from the first extension well drilled at Libra. Petrobras earlier confirmed two other oil discoveries in this field previously announced in 2014. The drilling results confirmed the presence of a column of hydrocarbons approximately 200 meters thick and reservoirs with good permeability and porosity. The well, which the Schahin Sertao drillship started on 27 September, reached a final depth of 5,780 meters in waters that were 2,160 meters deep. Libra is estimated to hold 8-12 billion barrels of recoverable crude. Brazilís total output in 2015 on a quarterly basis is predicted at 3.10 mb/d, 3.03 mb/d, 13.07 mb/d and 13.03 mb/d, respectively.

Oil production in Colombia, which was expected to decline by 80 tb/d in 2015 due to the oil price slump in late 2014, has now been revised up by 20 tb/d to average 0.96 mb/d, compared with the last MOMR. Oil output in 1Q15 was revised up by 30 tb/d to 1.05 mb/d. The increase was due to a rise in output at the 100% Ecopetrol-owned Castile heavy oil field in eastern Meta province, where production reached 124 tb/d during the period. Output also reached a record 85 tb/d at Chichimene, which is also 100% owned by Ecopetrol. Colombian oil output in 2015 on a quarterly basis is predicted at 1.05 mb/d, 0.98 mb/d, 0.93 mb/d and 0.88 mb/d, respectively.

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