IEA: production growth outlook for Brazilian oil and biofuels

IEA Deputy Executive Director Paul Simons presented the IEA outlook for Brazilian oil and biofuels at a recent event in Rio de Janeiro, organised by the country’s Ministry of Mines and Energy. Simons noted that though domestic oil demand is expected to keep falling to 3.1 million bpd in 2017, production growth will increase from 2.5 million bpd last year to 3.4 million bpd in 2021.

While oil production will gather strength despite logistical problems and other issues, the IEA expects the contraction in demand that began last year to continue into 2017 before economic recovery leads to slight growth that will restore total product demand to 2015 levels by 2021. Besides the economic slowdown, a drop in gasoline demand growth from 4% in the previous IEA five year outlook to 1% in the Medium Term Oil Market Report 2016 comes amid slower expansion of the national vehicle pool and a nearly 2% gain in fleet efficiency.

The presentation highlighted the country’s record biofuels output of 516 000 bpd in 2015, achieved due to a combination of a good sugar cane crop and optimal harvest conditions. In line with biofuels’ key role in Brazil’s Intended Nationally Determined Contribution (INDC) prepared for the UN climate talks last year, and in view of the country’s large flex-fuel vehicle fleet, the IEA foresees ethanol production further increasing, to around 675 000 bpd in 2021.

Deputy Executive Director Simons detailed the findings from the Medium Term Oil Market Report at the Eletrobras Center for Electrical Research (CEPEL). The event was chaired by CEPEL Director-General Albert Melo, who noted the close and ever-growing relationship between the IEA and Brazil, whose strong renewables portfolio and cutting edge oil production were featured in a recent special section on the country’s energy sector in the Agency’s flagship publication, the World Energy Outlook.

Adapted from press release by Rosalie Starling

Read the article online at: https://www.hydrocarbonengineering.com/refining/28042016/iea-production-growth-outlook-for-brazilian-oil-and-biofuels-3155/