South America has made a cost-cutting leap since 2013, when it was the world’s most expensive region for deepwater oil and gas production costs. Average operational expenditure (opex) per barrel of oil equivalent has more than halved since then, from roughly $26 to $12.7 in 2020, a Rystad Energy report shows. The region also enjoyed the largest cost decline globally this year, in both absolute and percentage terms.

South America’s deepwater opex is driven mainly by Brazil, which accounted for roughly 99% of the continent’s brownfield costs from 2013 to 2020. Brazil’s state oil company Petrobras alone accounted for nearly 88% of South America’s deepwater opex. It therefore makes sense to focus the cost reductions on Brazil to get the greatest impact.

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Source: Oil Price