Petrobras Eyes Nigeria, Others for Oil Exploration

Petrobras, Brazil’s state oil company, aims to explore deepwater oil in Africa, prioritizing Côte d’Ivoire offering nine offshore blocks. CEO Magda Chambriard cites interest from Nigeria and Angola. Plans indicate a strategic push to balance economic growth and profit, with ongoing challenges in Brazil’s Amazon region.

Brazil’s state-run oil behemoth, Petrobras, is setting its sights on Africa as its primary territory for development beyond South America. The company, led by Chief Executive Officer Magda Chambriard, has expressed a strong interest in deepwater oil exploration.

In an interview with Reuters, Chambriard revealed that Côte d’Ivoire offered Petrobras what she referred to as a “red carpet,” granting preferential rights for nine offshore exploratory blocks. This gesture is seen as a move to deepen the partnership between the Brazilian oil company and the West African nation.

Chambriard stated, “Ivory Coast has extended the ‘red carpet’ for Petrobras to explore deep and ultra-deep waters off its coast.” Additionally, she noted that nations like Nigeria, Angola, and Namibia are also keen on collaborating with the Brazilian firm.

Pointing to geological similarities, she said, “We are experts in the eastern margin of Brazil,” emphasizing that the correlation between Brazil and Africa is substantial, which makes the continent a logical target for their expansion.

Notably, Vice President Kashim Shettima of Nigeria mentioned three weeks back that Petrobras is aiming to re-enter Nigeria’s oil landscape, with a particular focus on frontier deepwater areas. This move aligns with the broader goal of reinvigorating bilateral ties as they prepare for the upcoming 2025 Nigeria-Brazil Strategic Dialogue Mechanism.

Petrobras is eyeing international oil stakes, especially in Africa, as domestic challenges persist. They are facing hurdles in securing environmental permits required for new drilling activities along the Amazon coast. Compounding this, the company has also set its sights on India, preparing to participate in an oil block auction scheduled for July.

Chambriard’s strategy reflects a dual challenge—supporting President Luiz Inacio Lula’s plans to leverage Petrobras for economic uplift while simultaneously delivering profits to investors. The company, vital to Brazil’s economy, finds itself amidst rising tensions within Lula’s administration, which seeks to utilize oil revenue for growth yet also promote Brazil as a leader in climate initiatives on the global stage, especially before the COP30 climate summit.

Despite delays in obtaining permits to drill in the environmentally sensitive Foz do Amazonas region, Chambriard is optimistic that final regulatory approvals may arrive in July’s latter half. Simultaneously, Petrobras has already initiated operations in Africa; it acquired a stake in a South African offshore oil field this year and plans to drill in São Tomé and Príncipe in early 2024.

However, it was not all smooth sailing. The company lost out to France’s TotalEnergies in a bidding contest for a share in Galp Energia’s offshore discovery in Namibia’s Mopane field. “We hope to be invited” to further develop the Mopane region, according to Chambriard, though specifics were not disclosed.

With decreasing Brent crude prices, Petrobras is pressured to implement cost-cutting measures and streamline projects in the forthcoming strategic plan covering 2026 to 2030. During the first-quarter earnings call this past month, Chambriard had hinted at an austerity direction that reassured investors, but she did not clarify the impact of these cuts on the company’s investment strategies.

Should these investment retrenchments occur, it could starkly contrast Petrobras’ previous plans, particularly following Lula’s administration’s assumption of office in 2023, which advocated for increased investments to stimulate the Brazilian economy. Moreover, Petrobras is gearing up to expand into fertilizer production, with a revival of operations expected at two plants in Sergipe and Bahia by year-end, as noted by Chambriard.

In summary, Petrobras is making significant moves toward expanding its exploration in Africa, particularly Côte d’Ivoire. Ambitions to explore deepwater sites demonstrate the company’s strategic pivot amid domestic obstacles. As Petrobras navigates the economic complexities and regulatory approvals, its capacity to balance investment demands and profit obligations remains a pivotal focus. The upcoming years are expected to determine how these ambitious plans unfold.

Original Source: punchng.com