Recent production growth from presalt resources increases Brazil’s total crude output

In August, Brazil's oil production from the deepwater presalt fields was just over 300,000 barrels per day (bbl/d), according to Brazil's federal oil, natural gas, and biofuels agency, and accounted for 15% of Brazil's total crude oil production (2 million bbl/d). The Agência Nacional do Petróleo, Gás Natural e Biocombustíveis (ANP) said that more than 90% of Brazil's total oil production is offshore in very deep water, and recent exploration efforts in Brazil have yielded discoveries of vast presalt oil fields. Production from the presalt fields increased nearly 40,000 bbl/d between January and August. EIA expects that production from presalt resources will grow significantly over the coming years as development proceeds.

In 2007, a consortium of oil companies (Brazil's Petrobras, BG Group, and Portugal's Petrogal) discovered oil in the Santos Basin off the coast of Brazil. This discovery was in exceptionally deep water, under thick layers of rock and salt in the Lula (formerly Tupi) Field. Further exploration revealed substantial reserves in a presalt layer 18,000 feet below the ocean surface. Following Lula, Brazilian officials announced additional presalt finds in the Santos Basin and in the nearby Campos and Espirito Santo basins. The first production came from the Campos Basin in 2008.

Brazil concluded its first presalt licensing round in October 2013. Of the eleven companies registered in the auction, five companies formed a partnership to submit the only bid: Petrobras, Royal Dutch Shell, Total, and Chinese national oil companies China National Petroleum Corporation (CNPC) and China National Offshore Oil Corporation (CNOOC).

This consortium won the rights to develop the Libra field, estimated to contain recoverable reserves of 8 -12 billion barrels. Estimates vary for total presalt resources. Some analysts place the total extent of presalt recoverable oil and natural gas reserves at more than 50 billion barrels of oil equivalent. For context, according to the Oil & Gas Journal, on January 1, 2013, Brazil held proved oil reserves of more than 13 billion barrels. As companies continue to conduct exploration in the presalt layer, EIA expects that reserve estimates will continue to grow, eventually doubling current levels and ultimately leading to increased production.

The Brazilian government passed legislation instituting a new regulatory framework for the presalt reserves in 2010. The legislation created a new agency, Pré-Sal Petróleo SA, to administer new presalt production and trading contracts with the oil and gas industry and laid out a new production sharing agreement (PSA) system for presalt reserves. In contrast to the existing framework for oil and gas exploration in Brazil, Petrobras (the state-owned oil company) will be the sole operator of each PSA and will hold a minimum 30% stake in all presalt projects.

For more information, see EIA's Country Analysis Brief (CAB) for Brazil.

Principal contributors: Michael Yo, Mark Eshbaugh