Brazil Oil Exports: Production Peak & Future Reliance on New Discoveries
Brazil may need to curtail its oil exports after 2034 if significant new discoveries aren’t made, according to Marcus D’Elia, a partner at Leggio Consultoria, a Brazilian supply chain consultancy.
D’Elia’s assessment, outlined in a recent note to the press, centers on the anticipated maturation of the Campos and Santos basins – currently the country’s primary oil-producing regions. He projects national production will peak around 2034, after which it will likely decline as existing fields yield less and fewer new ones come online.
Recent years of higher oil prices, around US$80 a barrel, have spurred project development and accelerated production, bringing output to approximately 4 million barrels per day (Mb/d), and sustaining growth through 2034, D’Elia explained. However, without new frontiers, that production and export volume will begin to fall.
The Equatorial Margin, particularly the Foz do Amazonas basin, represents Brazil’s most promising exploratory frontier. Estimates suggest recoverable reserves of around 10 billion barrels. Petrobras is currently drilling in the area. Another potential area, the Pelotas basin, is currently limited to seismic surveys, with Petrobras considering up to 10 exploratory wells if initial results are positive.
Despite potential production declines, D’Elia believes Brazil could maintain self-sufficiency in meeting domestic refinery demand until around 2055 by redirecting export volumes to the internal market. He also anticipates the growth of renewable energy sources will contribute to reducing reliance on fossil fuels.
Brazil exported approximately 1.7 Mb/d of oil in 2024, placing it among the world’s top ten exporters, with China as the primary destination, receiving 770,000 b/d. Petrobras has been increasingly directing exports towards Asia, expanding sales to India and South Korea, according to data from the National Agency of Petroleum, Natural Gas and Biofuels (ANP).
The state-owned Energy Research Company (EPE) forecasts Brazilian production will reach 4.9 Mb/d in 2035, peaking at 5.1 Mb/d in 2032. However, EPE’s Ten-Year Energy Plan 2035 notes this peak is not sustainable throughout the decade, even with the inclusion of currently undiscovered resources.
The ratio of proven reserves to production (R/P) currently stands at around 12 years, indicating production is guaranteed at the current pace for that period, assuming no new discoveries. Marcelo de Assis, a partner at MA2Energy, estimates peak production will occur between 2029 and 2032. He suggests that large-scale discoveries in the Equatorial Margin – a scenario he deems unlikely – could extend the plateau to around 2040.
Assis cautioned that a loss of self-sufficiency could occur by 2045 if oil and oil product consumption continues to grow at a moderate pace, given current GDP levels and the progress of electrification and efficiency programs. Increased investment in petrochemicals or a surge in transport demand could accelerate this timeline, whereas more aggressive electrification or biofuels programs could delay it.
The Brazilian Ministry of Mines and Energy (MME) expressed a more pessimistic outlook, stating that without new significant discoveries, Brazil could revert to being a net oil importer by 2040 due to the natural decline in production following the anticipated peak at the end of the decade.
A key factor contributing to the approaching production peak is the sharp decline in exploratory drilling, particularly wildcat wells, since 2013. This reduction stemmed from low oil prices, Petrobras’s financial difficulties, and a prioritization of pre-salt production development. The period also saw fewer declarations of commerciality for new oil and gas fields compared to the period following the initial pre-salt discoveries between 2006 and 2010.