Petrobras is pivoting to Africa as a key development area outside South America. CEO Magda Chambriard announced preferential rights granted by Côte d’Ivoire for exploratory offshore blocks, also leveraging opportunities in Nigeria, Angola, and Namibia. The company seeks to balance growth ambitions with current economic pressures, including lower oil prices and permit delays in Brazil.
Petrobras, Brazil’s state-run oil giant, is shifting its focus to Africa, eyeing the continent as its primary development area outside of South America. CEO Magda Chambriard revealed in an interview with Reuters that Côte d’Ivoire has extended what she called a “red carpet” for the company, granting preferential rights to nine offshore exploratory blocks. This gesture is seen as a move to strengthen ties between Petrobras and the West African country.
Chambriard mentioned that other African nations, such as Nigeria, Angola, and Namibia, have also shown interest in collaborating with Petrobras. She noted the geological similarities between Brazil’s eastern margin and Africa, saying, “The correlation between Brazil and Africa is unequivocal, so we need to go to Africa.” This comes amid Petrobras’ efforts to re-enter Nigeria’s oil sector, a topic discussed earlier by Vice President Kashim Shettima.
Petrobras has been keen on acquiring stakes in oil assets abroad, especially in Africa, since it faces challenges with environmental permits for drilling new oil in Brazil’s Amazon rainforest. Furthermore, the company plans to participate in upcoming oil block auctions along India’s coast in July, indicating a broader strategy beyond African operations.
Additionally, this approach marks Petrobras’ re-engagement with Africa after previously divesting its interests due to a focus on higher productivity areas in Brazil’s pre-salt fields. Chambriard’s strategy aims to balance President Luiz Inacio Lula’s ambition to leverage Petrobras for economic growth while ensuring returns for investors, all within the context of declining global oil prices.
As Brazil prepares for the COP30 climate summit, the government’s tightrope walk continues, attempting to highlight its commitment to combating climate change while utilizing oil revenues for development. Recently, Petrobras has encountered delays in obtaining environmental permits for drilling near the Amazon but remains optimistic about finalising permit approval by mid-July.
In terms of African ventures, 2023 saw Petrobras acquiring stakes in offshore fields in South Africa and planning drilling operations in São Tomé and Príncipe for 2024. However, efforts to secure a share in Namibia’s Mopane field were unsuccessful, as TotalEnergies outbid Petrobras. “We hope to be invited” to develop Mopane, Chambriard mentioned.
Faced with lower Brent crude oil prices, Petrobras has begun to restructure its operations, aiming to cut costs and streamline projects for its strategic plan covering 2026 to 2030. During a recent earnings call, Chambriard hinted at a shift towards austerity measures, which has been met with approval from investors, although she didn’t clarify if this would affect investment strategies moving forward.
A significant retreat from investment plans could signify a drastic change for Petrobras since Lula’s administration encouraged increased investments to stimulate Brazil’s economy. Looking ahead, the company is also expected to enhance its role in Brazil’s fertilizer production with plans to restart two plants by the year’s end.
Petrobras is redirecting its focus towards Africa for oil exploration and development, driven by opportunities in countries like Côte d’Ivoire, Nigeria, and Namibia. The company’s strategic ambitions come as it grapples with environmental permitting delays back home in Brazil and pressures from lower global oil prices. As it seeks to balance economic growth and shareholder returns, Petrobras is poised to make significant moves in both African and Indian markets while addressing operational austerity in its future plans.
Original Source: punchng.com
