Brazil Offshore Oil Hit by Regulator’s Crackdown on Drilling

(Bloomberg) —

Brazilian regulators are cracking down on some offshore drilling by oil giants like Petrobras and Equinor ASA, complicating exploration and production projects at a key moment in the nation’s effort to boost crude output. 

The drilling delays will complicate the nation’s efforts to reverse last year’s oil-production decline. Prior to 2024, Brazil had been a booming source of non-OPEC supply growth in global oil markets. Should output continue to flatline in 2025, that may signal to the OPEC+ alliance that it can begin raising exports without risking a price-killing supply glut.

Although some drilling halts resulted from serious safety issues — a Feb. 14 pump failure triggered an explosion aboard a Valaris Ltd. drillship working for Equinor — others have been suspended for seemingly minor issues that normally wouldn’t cause disrupti…