Brazil oil discoveries hit 18-year low

The number of oil and gas discoveries in Brazil fell to its lowest level in almost two decades in 2016 as a crude price slump entered its third year.

Just 20 discoveries were reported to national hydrocarbons regulator ANP, down from 75 in 2015 and 174 in 2012, according to BNamericas research.

Not since the first year of records, in 1998, have there been fewer hydrocarbon finds in South America's largest country.

Falling success rates coincide with declining rig activity as oil companies slash investment in exploration projects, many of which have become unviable.

The number of oil and gas exploration wells in Brazil fell to nine last month, down from 36 at the same time last year, according to oilfield services company Baker Hughes.

Despite the bleak year, operators in Brazil are expected to be buoyed by a rebound in oil prices next year, energy consultancy Wood Mackenzie said in a research note earlier in December.

Brent crude futures were trading at US$56.63/b on Friday, up from US$50.46/b on December 1. The commodity plunged to a 12-year nadir of US$28/b in January, around a quarter of its June 2014 price.

Brazilian oil and gas finds peaked at the start of the decade as state-run company Petrobras and the Eike Batista-owned OGX rode a commodities boom, rushing to plunder pre-salt riches deep below the Atlantic.

But in 2013 Batista triggered Latin America's biggest corporate default when he sought bankruptcy protection for OGX, now known as OGpar.

Meanwhile Petrobras remains mired in its worst ever crisis, racked by a massive corruption scandal and years of mismanagement.