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Brazil`s state-controlled energy company Petrobras plans to push more crude oil to top importer China by marketing a new medium-sweet grade that could be shipped from October. two sources with knowledge of the matter said.
Petrobras expects to start pumping pre-salt oil from new platforms in the fourth quarter that would add to output from Latin America`s biggest producer and lift its exports.
The new supply could enlarge Brazil`s market share in China as buyers there cut oil imports from the US following the Chinese government`s announcement it would impose tariffs on US crude in retaliation against similar moves by Washington.
`Petrobras` oil export curve is increasing and China is currently the company`s main market.` a Petrobras spokesman said in an email.
`With [Chinese] refineries` growing interest in buying oil directly from producers… Petrobras will grow its presence with these refiners.`
China`s demand for low-sulphur crude. such as oil from Angola and Brazil. jumped over the past two years after its independent refiners. also known as teapots. were allowed to import crude.
That has moved Brazil up two notches since 2017 to fifth on China`s supplier list. with 657.000 barrels per day (bpd) in the first quarter of this year. according to data from China customs.
The teapots` oil imports from Brazil more than doubled in the first half of 2018 to 350.000 bpd compared with the same period a year ago. according to Beijing consultancy SIA Energy.
Petrobras started production in April at its wholly owned Buzios pre-salt field in the Santos basin from platform P-74. located about 200 km off the Rio de Janeiro coast in water depths of 2.000 meters. according to the company`s website.
Two more platforms. P-75 and P-76. are to come online in the fourth quarter.
Total Buzios output is expected to grow to 750.000 bpd by 2021. once an additional four platforms come online. the company said.
Buzios crude has API gravity of 28.4 degrees and contains about 0.31 percent sulphur. similar in quality to Brazil`s Lula crude. one of the most popular oils in China. the company said.
The new supply could help lift Petrobras` crude oil exports. which dropped 53.8 percent in June from a year ago to 696.000 bpd as the company hiked its refinery output.
Petrobras` overall production in June stood at 2.03 million bpd. down 1.5 percent from May.
Brazil`s oil liquids output. including biofuels. is expected to rise by 200.000 bpd to 3.5 million bpd in 2019. after holding steady in 2018. according to consultancy Energy Aspects.
