The photo is sourced from Getty
Key to this growth will be Brazil, which will increase its output by 240,000 bpd thanks to new floating production storage and offloading (FPSO) units entering operation at the pre-salt fields on the Atlantic shelf: the Anna Nery FPSO unit with a capacity of 70,000 bpd will come on stream at the Marlim field, while the Almirante Barroso FPSO unit with a capacity of 150,000 bpd will become operational at the Buzios field. Another growth driver will be Brazil’s neighbour, Guyana, which is expanding its production capacities at the Stabroek shelf block: it saw the Liza Destiny FPSO unit (140,000 bpd) brought into operation in 2019 and the Liza Unity FPSO unit (220,000 bpd) launched in 2022. Since the latter unit will operate throughout the entire 2023, Guyana will be able to increase its oil production by 90,000 bpd (compared to the previous year when the Liza Unity FPSO unit was unavailable in some months).
The other 40,000 bpd of additional oil in 2023 will come from Argentina. As for other countries outside of OPEC, the biggest contribution to oil production growth will be made by the USA, which will raise its oil output by 1 million bpd. The bulk of this production increase will come from the Permian Basin with an additional 600,000 bpd, as well as from a substantial uptick in condensate production (by 340,000 bpd nationwide). The USA’s neighbour, Canada, will raise its oil output by 200,000 bpd through enhancing oil recovery from bituminous sandstones.
Finally, Mexico, which is listed as a North American country in the OPEC Report, will increase its oil production by 100,000 bpd to 2.1 million bpd. However, that level will still be almost two times below the all-time high recorded in 2004 (3.8 million bpd). The long-term reduction is linked to the production decline at Ku-Maloob-Zaap, a triple (with three brownfields) field located in the northeast of Mexico’s largest oil-bearing basin, Sureste: in 2022, the production volume at Ku-Maloob-Zaap (551,000 bpd) was 36% below the 2013 level. This decline was partly offset by new fields, including the Quesqui greenfield, which produced 133,000 bpd in 2022.
A problem persisting in Mexico’s oil industry is dwindling reserves, with a decline from 10 billion barrels in 2014 to 6 billion barrels in 2023, of which 81% lie in the Sureste basin and the other 19% are found in the Tampico-Misantla (14%) and Veracruz (5%) basins. As a result, Mexico’ share in global oil production went down from 5% in 2004 to 2% in 2022. The decline in Norway’s share – from 4% to 2% – in the same period was almost as steep. Nevertheless, the country might slightly recover thanks to production operations at Johan Sverdrup, the largest field in the North Sea: last December saw Phase 2 of that greenfield come on stream, which will allow Norway to raise its oil output by 200,000 bpd in 2023.
In addition to the countries listed above, oil production is expected to go up in Kazakhstan (by 100,000 bpd) and China (by 100,000 bpd) this year. It must be said, however, that the overall dynamics of oil production will be affected by the decline in supply in all other countries outside of OPEC, which will make up 670,000 bpd at the end of the year.