BRAZIL

Petrobras to Invest $100 Billion in Offshore Oil Production

“We need to keep the core [business] very safe . . . We are not doing [a] crazy transition,”

By Tsvetana Paraskova - Feb 07, 2024

Brazil’s state oil firm Petrobras plans more than $100 billion in investments this decade to boost offshore oil production as it looks to be one of the last oil producers standing when oil demand starts to drop, CEO Jean Paul Prates has told the Financial Times.   

“We need to keep the core [business] very safe . . . We are not doing [a] crazy transition,” the company’s top executive told FT, commenting on the recently announced strategic plan through 2028.  

Petrobras needs new oil exploration and production frontiers open as it wants “to be able to be there at the very end of the fade-out of oil,” said Prates, who became CEO at the Brazilian state energy firm a year ago under leftwing Brazilian President Luiz Inácio Lula da Silva.

As much as $73 billion out of the $102 billion total capex planned from 2024 to 2028 is set to go to exploration and production, according to Petrobras’s presentation to investors last week.

After spending a decade on selling off many assets outside Brazil, Petrobras is now shifting its strategy to portfolio diversification, keeping the focus on the most profitable assets, the company said. Reserves replacement, new frontiers, and increased gas supply are all pillars of the new exploration and production strategy.

Petrobras is now re-evaluating its portfolio in search of synergies and economic diversification and is looking at new frontiers in exploration, especially in the Equatorial Margin offshore Brazil, Prates said in the investor presentation.

Last autumn, Prates said that Petrobras expects to begin in 2024 offshore exploration drilling close to the mouth of the Amazon River in the so-called Equatorial Margin offshore Brazil.

The Brazilian firm currently doesn’t have permission from regulators to drill for oil and gas in the environmentally sensitive area.

Petrobras has appealed the decision of the Brazilian environmental protection agency, which last year refused to grant approval for the project.  

By Tsvetana Paraskova for Oilprice.com