Brazil Pumps Up Oil Aspirations

Brazil Pumps Up Oil Aspirations


SÃO PAULO—Brazil’s statecontrolled oil company, Petrobras, said it would invest $102 billion before the end of 2028 as Latin America’s biggest nation positions itself to become one of the world’s major oil powers. “Someone has to produce oil, right?” the company’s chief executive, Jean Paul Prates, said on Friday. The investment plan, unveiled late Thursday by Prates, is 31% more than the $78 billion Petrobras had announced in its previous five-year plan for the 2023-2027 period. More than 70% of the outlay will be spent on production and exploration, the plan said. As the world’s major economies invest heavily in clean energy, weaning themselves off fossil fuels, Brazil has thrown ever more money behind oil production, tapping deep water reserves off the coast of Rio de Janeiro and eyeing potentially vast new deposits near the mouth of the Amazon River. “Just because we’ve reached the conclusion that the world needs clean energy and increasingly more of it,” Prates said, “it doesn’t mean that we should condemn oil and stop pumping overnight.” If it weren’t for oil profit, Prates said, Petrobras wouldn’t be able to invest in renewable energy. With output cuts by Saudi Arabia and Russia, Brazil is set to be one of the top three sources of global oil-production growth this year, alongside the U.S. and Iran, said the International Energy Agency, a Parisbased group of some of the world’s biggest energy users. Brazil is the world’s ninthbiggest oil producer and Latin America’s largest by far. It posted record oil-and-gas production in September of 4.7 million barrels of oil equivalent a day, more than twice as much as Mexico. Of that, 3.7 million barrels was crude oil, equivalent to more than a quarter of U.S. production and 17% more than the same month a year earlier, oil regulator ANP said. “Petrobras has an absurdly high capability to generate cash,” said Pedro Galdi, an investment analyst at Mirae Asset Brasil, a São Paulo-based brokerage firm. The problem with Petrobras isn’t cash flow or technical know-how, Galdi said. “The big concern is politics,” he said, citing fears that President Luiz Inácio Lula da Silva, who took office in January, could seek greater influence over how Brazil’s biggest company is run. Between 2011 and 2016, under the Workers’ Party, Petrobras incurred a loss of about $30 billion after the government forced the company to fund gasoline and diesel subsidies to fight inflation. By 2015, Petrobras had become the most indebted oil major in the world, owing $130 billion to creditors. Politicians also used the company as a piggy bank for decades, taking bribes in exchange for contracts, prosecutors learned as they investigated the sprawling Car Wash corruption scandal. The affair, uncovered in 2014, ensnared dozens of Brazil’s most powerful businessmen. It also landed da Silva in jail in April 2018 for 19 months, before his convictions were annulled. Prates said he had suffered no pressure from da Silva to lower prices and didn’t expect to do so. “Lula never asked me directly—or indirectly—to interfere with prices,” said Prates—using a shortened version of the president’s name— who is a member of the Workers’ Party. Governance changes after the scandal have helped “bulletproof” Petrobras against the errors of the past, said Carolina Chimenti, a senior analyst at Moody’s Investors Service in São Paulo.

Nov 29, 2023 10:52
wall street jornal |


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The section of oil, gas and petro-chemistry is the up-most and first industrial vantage of the country and the pivot of the Economy of Iran. Regarding the importance of this section and the need for coordinating and organizing the most active people in the field of production and exporting oil ,gas, and petrochemical products ,some forethoughtful and job- makers in the private section of the country decided to come together to fight against the threats by using the opportunity of mass intelligence and potentials.