Brazil’s oil regulators have ordered temporary suspensions of several offshore drillship operations, citing what industry executives described as minor technical issues that typically would not disrupt normal drilling activities. These halts, reported on Tuesday, could potentially slow Brazil’s expected growth in crude oil production.
The suspensions, which affect the drilling of additional wells to existing discoveries and the exploration of new offshore resources, come on the heels of last year’s unexpected stoppages. In 2023, unplanned disruptions led to a 1.3% drop in Brazil’s crude oil production, which fell to 3.358 million barrels per day (bpd), down from a record high of 3.402 million bpd in 2022, according to data from Brazil’s oil regulator, ANP.
This decline was below expectations, as many analysts had anticipated Brazil to be a leader in non-OPEC supply growth, second only to the United States. The Organization of the Petroleum Exporting Countries (OPEC) continues to highlight Brazil as a key contributor to non-OPEC oil supply growth, alongside the U.S., Canada, Norway, and Argentina, for both 2025 and 2026.
The recent suspensions could further limit Brazil’s oil production growth potential this year. One of the affected drillships was halted following an explosion on a Valaris-operated rig at Equinor’s Bacalhau field on February 14. According to a report seen by Bloomberg, the incident prompted a work stoppage until the operator can ensure the drillship’s safety. Equinor confirmed that the explosion, caused by a malfunction, did not result in injuries, fatalities, or oil spills.
Equinor is aiming to begin production at the Bacalhau field later this year, with Phase 1 of development expected to yield 220,000 bpd, alongside an estimated recovery of over 1 billion barrels.
While the Bacalhau field incident is a clear reason for the temporary halt, sources told Bloomberg that other suspensions in Brazil’s offshore sector were due to issues considered minor by industry standards, and were unlikely to lead to such stoppages under normal circumstances.