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World Oil Supply

OPEC Monthly Oil Market Report – October 2017

55

Brazil

According to national sources,

Brazilian liquids output

declined by 0.05 mb/d m-o-m in July to 3.31 mb/d,

which is higher by 0.09 mb/d, y-o-y. A 52 tb/d m-o-m decline in crude output led to the lowering of crude

supply to average 2.62 mb/d. This was, particularly caused as a result of maintenance at the Parque das

Baleias complex. According to Petrobras preliminary data in August, liquids supply is estimated to decrease

by 0.02 mb/d to average 3.29 mb/d, including 2.61 mb/d of crude. Crude oil output fell for the second

consecutive month amid ongoing maintenance shutdowns at offshore platforms in the pre-salt region.

Brazil’s eight month average crude oil output was higher by 0.2 mb/d at 2.63 mb/d compared to the same

period a year ago, while this average indicates only 0.12 mb/d of growth compared to the 2016 annual

average crude output. The reasons for this mild growth was mainly due to the lasting maintenance at

platforms in both drilling regions of post-salt and pre-salt, as well as the heavy decline reported from post-salt

reservoirs in the Campos Basin. Although oil output from Campos increased m-o-m by 53 tb/d, it remained

lower y-o-y by 0.17 mb/d. Oil production in Lula, the largest offshore field in Brazil, reached an average of

0.7 mb/d y-t-d (August), showing growth of 0.17 mb/d from 2016. In the country’s largest-ever Bid Round,

according to oil and gas regulator ANP, Exxon Mobil took six blocks in consortia with state-controlled oil

giant Petroleo Brasileiro in the promising offshore Campos basin, after bidding 2.24 billion reals for one area

alone. A 50-50 partnership between Brazil’s state-controlled Petrobras and Exxon Mobil won all six blocks,

paying totalling 3.59 billion BRL. Total supply output in 2H17 is expected to be higher by 0.10 mb/d

compared with 1H17.

Brazil’s annual oil supply forecast in 2017 was revised down by 27 tb/d, due to the lower than expected

output in 3Q17 to average 3.35 mb/d, and is expected to grow by 0.21 mb/d y-o-y. The total supply forecast

for 2018 was revised up owing to the base change in 2017, though growth of 0.24 mb/d with an average

supply of 3.59 mb/d is predicted.

FSU

The FSU’s oil supply

is estimated to grow by 0.08 mb/d in 2017 to average 13.94 mb/d, revised down by

71 tb/d from the September

MOMR

. A downward revision of 75 tb/d was seen in Russia’s production growth

in 2017 according to actual data in 2Q17 and 3Q17. Hence, a contraction of 0.04 mb/d is anticipated for the

Russian Federation this year. Oil production in Azerbaijan is predicted to contract by 0.06 mb/d to average

0.79 mb/d in 2017, while oil supply from Kazakhstan will grow by 0.18 mb/d to average 1.74 mb/d.

For 2018, the FSU’s oil supply in absolute terms was revised down by 0.15 mb/d due to a base change in

2017; therefore, the expected growth revised down by 0.05 mb/d which led to a contraction of 0.01 mb/d for

the next year. Other countries in the region will also decline except Kazakhstan.

Graph 5 - 22: FSU liquids supply quarterly

forecast, 2016-2018

Graph 5 - 23: Russia liquids supply quarterly

forecast, 2016-2018

180

164

145

-163

-200

33

12

98

-250

-200

-150

-100

-50

0

50

100

150

200

13,400

13,500

13,600

13,700

13,800

13,900

14,000

14,100

14,200

1Q 2Q 3Q 4Q

2017/16 (RHS)

2018/17 (RHS)

2016

2017*

2018*

Note: * 2017 and 2018 = Forecast.

Source: OPEC Secretariat.

Y-o-y change (tb/d)

Production (tb/d)

176

9

-80

-267

-267

14

83

122

-300

-200

-100

0

100

200

10,800

10,900

11,000

11,100

11,200

11,300

1Q 2Q 3Q 4Q

2017/16 (RHS)

2018/17 (RHS)

2016

2017*

2018*

Note: * 2017 and 2018 = Forecast.

Source: OPEC Secretariat.

Y-o-y change (tb/d)

Production (tb/d)