South American countries playing larger roles in offshore oil production

South America has made a cost-saving leap since 2013 when it was the world's most expensive region for deep-sea oil and gas production costs. Average operating expenses (Opex) per barrel of oil equivalent have more than halved since then, from about $ 26 to $ 12.7 in 2020, according to a report by Rystad Energy. The region also saw the world's largest decrease in costs this year, both in absolute terms and in percentage terms. South America's deep-sea opex is primarily powered by Brazil, which accounted for around 99% of the continent's brownfield costs between 2013 and 2020. The Brazilian state-owned oil company Petrobras alone had a stake of almost 88% in South America's deep-sea opex. So it makes sense to focus the cost reductions on Brazil for the greatest impact. One of the factors that helped Brazil save on Opex is Petrobras' switch to the Floating Production, Storage and Unloading Vessel (FPSO) fleet. When the state actor initially started production in pre-salt basins, it decided to rent most of its fleet, which led to an increase in its operating costs. In 2015-2016 the company started ordering more of its own FPSOs. Our figures show that Petrobras increased its fleet of its own FPSOs by 16 while reducing the number of leased FPSOs by six from 2013 to 2020. Eight out of ten fields in Brazil with start-up years from 2018 to 2020 were developed via their own FPSOs, while the other two fields use leased units, which confirms the country's shift from leased to own ships. Spurred on by the current volatility of the Covid-19 market and the turbulence in the energy industry, Petrobras has also reduced its workforce by around 22% this year through purchase programs. The company plans to cut costs totaling approximately $ 2 billion in 2020 by cutting overheads and eliminating unnecessary office space.