Brazil oil exploration wells dip to single figures

Monday, November 28, 2016

The number of oil and gas exploration wells in Brazil has sunk to single digits as a prolonged crude price slump prompts operators to halt projects.

Just nine wells are being drilled in South America's largest country, eight of which are operated by state-run oil company Petrobras, according to data published by industry regulator ANP.

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The pre-salt Sapinhoá and Libra fields are home to two wells each while Sudoeste Urucu, Sépia, Baixa do Juazeiro, Bonsucesso and SEAL-T-420 have one active well apiece.

Oil services firm Baker Hughes said Brazil had 14 rigs in operation last month, down from 36 a year earlier and 82 in October 2012.

Declining exploration activity comes as Brent crude futures continue to hover below US$48/b, down from a peak of more than US$110/b in June 2014. The market hit a nadir of US$28/b in January.

Last week the International Energy Agency (IEA) predicted investment in new crude oil production would fall for a third straight year in 2017 amid a continued global supply glut.

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