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Brazil’s Petrobras seeks to replenish oil reserves amid opposition

Felicia Tan
Felicia Tan • 2 min read
Brazil’s Petrobras seeks to replenish oil reserves amid opposition
Keppel shipyard FPSO conversions. Photo: Keppel O&M
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Jean Paul Prates, the new CEO of Brazilian state-owned Petroleo Brasileiro S.A. (Petrobras), is seeking to replenish its oil reserves amid opposition to the company’s plans to set up an exploratory well off the mouth of the Amazon River.

To not do so would be a “fatal error”, stressed Prates, who added that the move would spell the death of the company in 30 years. Prates joined the company as its CEO on Jan 26. The former senator was chosen by Brazilian president Luiz Inacio Lula da Silva, who took office in January.

In his interview with the Financial Times, Prates said that securing more deposits was vital to preparing for the energy transition. Petrobras’ decision to drill some 175km from Brazil’s northern coastline was rejected by Brazil’s environment agency, as the deepwater block is in an area of the Atlantic Ocean that was deemed “ecologically rich and fragile”, notes the paper.

“In the energy transition this is important, because in an oil company the present pays for the future,” says Prates. “You have to reinvent [yourself] to be something else in 30 years. You probably won’t be selling oil and gas, or very little.”

On decarbonisation, the new Petrobras management increased its budget for initiatives to a maximum 15% of its total US$78 billion capital expenditure over the next four year from 6% before.

Seatrium, the combined entity comprising Sembcorp Marine (SembMarine) and Keppel Offshore and Marine (Keppel O&M), has secured billions of dollars in contracts in Brazil. Most recently on Oct 5, 2022, SembMarine secured a contract worth US$3 billion from Petrobras.

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