October 7, 2016 / 8:12 PM / 2 years ago

UPDATE 1-Petrobras sees oil output cap outside OPEC unlikely, source says

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RIO DE JANEIRO, Oct 7 (Reuters) - Oil producers outside the Organization of Petroleum Exporting Countries are unlikely to agree to any suggestion from the group to limit production, an unnamed official at Brazilian state-controlled oil company Petróleo Brasileiro SA said on Friday.

Even if OPEC extended to countries outside the group a request to join its strategy to limit crude output and prop up prices, “it would be very hard for non-OPEC nations like Brazil to accept it,” said the official, who requested anonymity because the matter is sensitive.

“It would not make much sense,” the official added.

OPEC seems to have less power nowadays to undertake any drive to limit crude production, particularly because of the shale oil and gas industry boom in the United States, the official noted.

Petrobras accounts for around 80 percent of Brazil’s oil production.

OPEC Secretary General Mohammad Barkindo said in Washington the group was planning consultations with non-members on efforts to manage global oil output.

“The market changed and the decision power also changed between groups .... U.S. and Russia are stronger, particularly the U.S. due to shale,” the official said.

Brazil was first invited to an OPEC meeting in 2008, in Saudi Arabia, when producers were dealing with a completely distinct situation. Prices were too high and there was the need for urgent additional supply.

Brazil’s oil and natural gas production increased by 25 percent from the end of 2010 to last August to 3.29 million barrels of oil equivalent per day (boed), as the country progresses with works in the subsalt area off the coast of Rio de Janeiro.

The country is currently the world’s 12th largest oil producer, according to BP’s 2016 Statistical Review of World Energy, a reference database. (Reporting by Rodrigo Viga Gaier; Additional reporting and writing by Marcelo Teixeira; Editing by Guillermo Parra-Bernal and Sandra Maler)

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