Brazils government-owned oil sales to climb sharply, official says

div classBodysc17zpet90 cdBBJodivpBy Sabrina Vallep

pHOUSTON Reuters – Brazils direct sales of crude will more than double this year and rise sharply this decade, as oil majors deliver more of their output to the government under production sharing agreements, according to a state official.pdivdivdiv classBodysc17zpet90 cdBBJodiv

pGovernmentowned volumes, until now nearly irrelevant, are ramping up and will reach 1.127 million barrels per day bpd by 2031, according to Eduardo Gerk, head of PréSal Petróleo SA PPSA, the staterun company that oversees the countrys productionsharing contracts. p

p“Our scale of magnitude has started to change,” he said on the sidelines of the Offshore Technology Conference OTC in Houston. p

pPPSA was created in 2013 to manage Brazils stake in the vast presalt oil discoveries found off its coast. p

pThe states share of the oil comes from fields run by Shell Plc, TotalEnergies SA as well as statecontrolled oil producer Petrobras. They are newly delivering higher volumes under production sharing regulation the country inaugurated last decade. p

pPPSA has sold all of the 9.5 million barrels it expects to receive from commitments this year, in 19 shipments delivered to Petrobras. And as new wells go on stream, annual volumes should jump to 411 million barrels of oil in 2031, Gerk said. p

pPetrobras thus far has bought all of PPSA‘s allotted oil through competitive auctions in twotothree year contracts, outbidding Shell, Total, Portugal’s Galp and Chinese producers. p

pFuture auctions will likely be held through Brazils stock exchange operator B3, Gerk said, that will handle governmentowned production that should average 95,000 bpd in 2024, he said. p

pHowever, hiring a trading firm to market the oil also is a possibility, Gerk said. p

p“We will have to review market conditions then,” he said. p

pThe next big slug of Brazils oil to be sold will come in mid2024, when Petrobras contracts from its massive Buzios and Mero fields start to expire, Gerk said. Future production from Sepia, Atapu, Itapu and Bacalhau fields also is yet to be marketed, he said. p

pBrazil produces about 3 million bpd of crude today, with the government stake responding for less than 1 of the total. The government stake is projected to rise to about 20 of the countrys total production in 2031, when total country production is estimated at more than 5 million barrels per day of crude, Gerk said. p

pThe government‘s oil volumes include a stake of the Mero deepwater field, where consortia among Brazil’s Petrobras, Shell and Chinas CNOOC and CNPC on Monday started production. The groups platform is designed to pump up to 180,000 bpd of crude.p

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pp Reporting by Sabrina Valle Editing by Alexandra Hudsonp

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