Petrobras Eyes Nigeria, Others for Oil Exploration

Petrobras is shifting its focus to Africa for new oil exploration opportunities, particularly in Côte d’Ivoire, with expansions planned in Nigeria and Angola. The Brazilian company is trying to balance international growth while managing costs and environmental regulations at home, as it faces challenges with oil prices and investment strategies.

Petrobras, Brazil’s state-run oil company, has set its sights on Africa as its priority region for growth outside of South America. The company’s CEO, Magda Chambriard, announced that they have received what she called a “red carpet” welcome from Côte d’Ivoire. This invitation includes preferential rights to nine offshore exploratory blocks, indicating a strengthening relationship between Petrobras and the West African nation.

During an interview with Reuters, Chambriard elaborated on this opportunity, emphasizing the significance of the move. “Ivory Coast has extended the ‘red carpet’ for Petrobras to explore deep and ultra-deep waters off its coast,” she noted, highlighting that this is a substantial step in their international ambitions. Other countries like Nigeria, Angola, and Namibia have also shown interest in partnering with Petrobras for exploration projects.

Chambriard pointed out the geological similarities between the eastern margin of Brazil and African coasts, asserting, “The correlation between Brazil and Africa is unequivocal, so we need to go to Africa.” This strategic expansion aims to reinforce Petrobras’ role in global oil markets as it seeks to adapt and thrive despite environmental regulatory hurdles back home.

Just weeks prior, Nigeria’s Vice President Kashim Shettima revealed Brazil’s state oil firm is looking to re-enter Nigeria’s oil sector. The focus seems to be on unexplored deepwater terrains, aiming to bolster bilateral cooperation ahead of the 2025 Nigeria-Brazil Strategic Dialogue. Amidst this international push, Petrobras remains concentrated on boosting reserves as it faces challenges in securing permits to explore new territories, especially near the Amazon rainforest.

In addition, Petrobras is eyeing opportunities off the coast of India. An oil block auction is scheduled for July, which could potentially add to its international portfolio. This exploration is seen as a way to revitalize its operations in global markets, especially after having divested from Africa in previous administrations in favor of Brazil’s high-yield pre-salt areas.

The company’s ambition aligns with a broader strategy under President Luiz Inacio Lula’s administration, which aims to utilize Petrobras to stimulate Brazil’s economy while also meeting investor return expectations. This, however, has led to complications given that Petrobras is under pressure to also present itself as a leader in combating climate change as it prepares to host the upcoming COP30 summit.

Delays concerning drilling permissions in the Amazon region persist, yet Chambriard expressed optimism about securing the necessary approvals within July. On the operational front, Petrobras has already initiated some of its African plans; in 2023, it successfully acquired a stake in a South African offshore oil field. Additionally, in early 2024, it is set to drill in São Tomé and Príncipe.

Despite some setbacks, including a loss to TotalEnergies in Namibia’s Mopane field tender, Chambriard maintains that they are open to collaborations. “We hope to be invited” to develop Mopane, she commented. Faced with the challenge of reduced Brent crude oil prices, Petrobras is considering cost-cutting measures and project simplifications as part of its 2026-2030 strategic plan. During a recent earnings call, Chambriard hinted at an austerity approach which may impact future investments.

This potential change could mark a significant shift for Petrobras, especially given Lula’s push for increased investments since taking office in 2023. Furthermore, Petrobras is expected to expand its involvement in Brazil’s fertilizer production, with operations at two plants in Sergipe and Bahia resuming by year-end.

In summary, Petrobras is expanding its reach into Africa, particularly focusing on deepwater exploration with favorable offers from Côte d’Ivoire. The company’s strategy appears to be balancing growth ambitions abroad with the need for cost control and investor returns back home. As global pressures mount, Petrobras’ efforts could reshape its operational landscape in the upcoming years, especially against the backdrop of environmental challenges and market fluctuations.

Original Source: punchng.com