Brazil’s state-owned Petroleo Brasileiro SA (Petrobras) managed to keep its oil exports flowing at a record amount in recent months, even as some economies are closed, thanks to robust demand from China’s independent refineries in Shandong, according to the company’s executives on a Friday earnings call.
Petrobras announced a reduction of 200,000 bpd or nearly 10% of its oil production by early April, on high inventory pressure due to weak global demand amid the coronavirus pandemic. However, the company surprisingly reversed its cut within a month. Executives credited its strong relationship with Chinese independent refineries for helping Petrobras to go through the demand crisis.
Petrobras noted that it has the capacity to increase its oil exports by 10% from a record level of 1 million bpd in April. According to Petrobras’ Chief Logistics Officer André Barreto Chiarini, its crude from Lula, Iracema, Sapinhoa and Buzios fields have similar characteristics to Chinese crude, which production is declining.
For the domestic market, the declining adherence to social distancing measures supported a significant rebound in demand for gasoline and diesel, Petrobras downstream chief Anelise Lara said. Demand for gasoline and diesel is now 40% and 30% below the normal levels, respectively, after declining to 65% and 50% off normal levels.
