Petrobras has set its April oil production at 2.07 million barrels per day (bpd), after having reduced production by 200,000 bpd in the past two weeks in response to the?
Petrobras has set its April oil production at 2.07 million barrels per day (bpd), after having reduced production by 200,000 bpd in the past two weeks in response to the low oil prices, Brazil's state-owned oil firm?said?in a securities filing on Tuesday.??
?The company continues monitoring the market and, if necessary, will make new adjustments always ensuring safety conditions for people, operations and processes,? said Petrobras, the largest producer in the South American country, which not part of the OPEC+ group.
At the end of March, Petrobras?like many major oil firms?announced reductions in capital spending and production guidance due to the oil price crash and the collapse in global oil demand in the coronavirus pandemic.
Petrobras?slashed?its planned investments for 2020 to US$8.5 billion from US$12 billion and mothballed operating platforms in the shallow-water fields with higher lifting costs per barrel that had turned cash-flow negative after the price collapse. On March 26, Petrobras said it would cut its oil production by 100,000 bpd by the end of March. A week later, Petrobras?said?it would cut its oil production by 200,000 bpd as of April 1?a volume that includes the production reduction announced the previous week.??
Premium: Ending The Oil War Isn't Enough
Production levels at Petrobras, being a state-controlled entity, could?play an important role?in global oil supply management in the coming months, if Brazil and other nations outside the current OPEC+ group, most notably the United States, Canada, and Norway, were to join OPEC+ and its leaders Saudi Arabia and Russia in a global production-cut deal to possibly remove 10 million bpd from the market.
Brazil was expected to be the?third-largest growth driver?of non-OPEC supply in 2020 after the U.S. and Norway, according to OPEC.
Last week, Petrobras's chief executive Roberto Castello Blanco said that the oil price war between Saudi Arabia and Russia and any reported talks they may or may not be holding had?become irrelevant?in the context of the demand loss in the Covid-19 pandemic.? ?
Analysts are still skeptical that such a large and diverse group of oil producers will agree and implement a collective cut, especially as every country signals they would not reduce their production if the United States doesn't commit to cuts, too.
By Tsvetana Paraskova for Oilprice.com
More Top Reads From Oilprice.com:
Oil Price Crash Opens A Window Of Opportunity For Renewables
World's Largest Oil Trader Says Demand Could Plummet By 20 Million Bpd
Is Gazprom's LNG Megaproject Doomed To Fail?