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Brazil’s state-controlled oil giant Petrobras delivered record upstream production and stronger downstream performance in the first quarter of 2026, underscoring the company’s continued operational momentum across its core assets.

The company said its average oil, natural gas liquids, and gas production reached a record 3.23 million barrels of oil equivalent per day (boe/d) in Q1, up 3.7% quarter-on-quarter and 16.1% year-on-year, supported primarily by the ramp-up of multiple floating production, storage, and offloading (FPSO) units in key pre-salt fields.

Growth was led by projects in the prolific Santos and Campos basins, including Búzios and Mero, where new wells and recently commissioned platforms boosted output. Petrobras also reported multiple operational records, including total operated production of 4.65 million boe/d and pre-salt output exceeding 4 million boe/d.

The company highlighted improved reliability across production systems, with fewer maintenance-related disruptions contributing to higher efficiency and stable operations.

In refining, Petrobras posted a 6.7% increase in total derivatives production to 1.816 million barrels per day, with refinery utilization reaching 95% during the quarter.

Higher refinery throughput supported increased domestic fuel sales and reduced reliance on imports, particularly for liquefied petroleum gas (LPG), where imports fell to their lowest levels. Diesel and aviation fuel remained key output drivers, accounting for a significant share of refined product volumes.

The company also achieved record production levels for low-sulfur diesel (S10), reflecting both stronger demand and efforts to optimize higher-value product yields.

Petrobras’ performance highlights the ongoing importance of Brazil’s pre-salt reserves, which remain among the most competitive offshore oil assets globally due to high productivity and relatively low breakeven costs. Continued investment in FPSOs and subsea infrastructure has allowed the company to steadily scale output from these fields.

The results also align with a broader industry trend in which national oil companies are maximizing returns from existing assets while improving operational efficiency, rather than aggressively expanding into higher-risk exploration.

At the same time, Petrobras is gradually integrating lower-carbon initiatives into its portfolio, including partnerships to supply fuels with renewable content - signaling a measured approach to energy transition pressures.

By Charles Kennedy for Oilprice.com

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