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Low oil prices have not affected Brazil's oil boom

In response to the epidemic and the plunge in oil prices, Petrobras cut its planned annual expenditure by 29% in March 2020 and closed the shallow water platform. This has not hindered production growth. Petrobras’ daily commercial oil production in the second quarter of this year increased 4.1% year-on-year to 2.5 million barrels. This was mainly driven by the large-scale expansion of the national oil companies in the sub-salt oil fields. The daily output of these oil fields increased by nearly 31% to 1.5 million barrels. There are signs that even the continued impact of the new crown epidemic, weak oil demand and weaker prices will not stop Petrobras’s continued growth in oil production.

As the threat of the epidemic diminishes, Petrobras is strengthening its offshore operations, especially in the high-yield subsalt oil fields. Petrobras plans to restart the connection of the new oil well this month, perform maintenance and commission the new oil well. This will enable the national oil company and Brazil to achieve strong growth in hydrocarbon production.

In order to curb the spread of the new crown epidemic, Brazil has taken measures to suspend non-essential businesses and shut down non-economic oil production due to the plunge in oil prices, but these measures have little impact on Brazil's hydrocarbon production. According to data from the National Petroleum Institute (ANP-Portuguese abbreviation), Brazil's average daily oil and gas production in August this year was slightly higher than 3.9 million barrels of oil equivalent, which was nearly 1% higher than in July and 2.6% higher than the same period last year.

The Santos and Campos basins are where most of Brazil's oil and natural gas are produced, and oil and gas production in July accounted for 68% and nearly 26%, respectively. Petrobras is the main producer, and nearly 95% of Brazil's oil production in August came from this company.

In January of this year, the largest economy in Latin America witnessed the achievement of a new milestone in its vital oil industry, with a record daily extraction of 3.168 million barrels of crude oil. The COVID-19 pandemic and the plunge in oil prices in March this year have not slowed down the oil boom in the largest economy in Latin America.