LONDON – South America’s offshore production is set to overtake volumes from North America by 2024, according to GlobalData.
Various major projects off Brazil and Guyana have passed final investment decisions this year and appear less likely to be postponed or suspended, the consultant claims.
However, certain key projects in US waters have been delayed, due in part to COVID-19, and there has been a steep decline in Mexico’s producing shallow-water projects. The impact on overall production will not be reversed by the 13 planned or announced projects, the consultant added.
Effuah Alleyne, senior analyst at GlobalData, said production off North America will likely fall by 15% during 2022-2024.
“Improving the region’s trend will require a combination of factors not exclusive to better market pricing to support project economics, enhanced recovery for existing projects and the expansion of resource base, especially in Mexico.
“In addition, projects in the US and Canada have been bottlenecked by pipeline capacity and so increasing pipeline infrastructure will alleviate some of the issues faced.”
GlobalData expects total offshore production for the Americas to build steadily from 8.65 MMboe/d this year to 9.15 MMboe/d by 2024, driven by Brazil’s presalt area and Guyana’s ultra-deepwater projects.
Alleyne commented: “Brazil’s prolific presalt region is surviving the industry downturn mainly due to the robust economics of its current and upcoming projects – a result of high productivity, high-quality crude wells.
“Projects in this region have breakeven oil prices as low as $35/bbl, compared to Brent’s current price averaging $40/bbl. In addition, national oil company Petróleo Brasileiro has steadily streamlined its portfolio to focus on exploration and production activities in the presalt layer, while divesting non-core assets in onshore, shallow water and post-salt areas.
“Guyana’s ultra-deepwater projects in the frontier Guyana-Suriname basin have breakeven oil prices as low as $23/bbl, with short-term production expected to grow 10-fold by 2024 from projects such as Liza Phase 2.”