Petrobras makes strategic return to Africa – 10/02/2024 – Market
Petrobras announced this Tuesday (1st) its second investment in a strategy to return to Africa, with the aim of diversifying the search for new oil reserves six years after selling a subsidiary that operated on the continent.
The operation was closed with the French TotalEnergies, from whom Petrobras acquired a 10% stake in an exploratory block in the Orange basin, which came into the sector’s focus after recent discoveries by Total itself, the English Shell and the Portuguese Galp.
At the end of 2023, the company had already announced the purchase of shares in three exploration blocks operated by Shell in São Tomé and Príncipe, which also had discoveries in recent years.
According to the state-owned company, the operation announced this Tuesday “is aligned with the company’s long-term strategy, which aims to restore oil and gas reserves through the exploration of new frontiers, both in Brazil and abroad, and acting in partnership “.
The block, called DWOB (Deep Western Orange Basin), is located in deep waters, the focus of the expansion of Petrobras’ exploration and production area. The company has already informed that it also evaluates assets in Namibia, another country with relevant discoveries in recent years.
The return to Africa is the first step in a strategic change at Petrobras after the beginning of the Luiz Inácio Lula da Silva (PT) government. Under Jair Bolsonaro (PL), the company divested itself of much of its international operations.
At the end of the Michel Temer government, he had already sold a 50% stake in PO&GBV, a partnership with the BTG bank that at the time had operations in Nigeria — before, it also operated in Angola, Benin, Gabon and Namibia.
The company maintains its main focus on the development of pre-salt reserves, but assesses that it needs to seek new exploratory areas abroad to avoid a decline in its production from the next decade onwards.
The main bet in this regard are the basins on the Brazilian equatorial margin, which stretch from Rio Grande do Norte to Amapá, and are currently the target of conflict between the energy and environmental areas of the government. Also in Brazil, the Pelotas basin, in Rio Grande do Sul, is another possibility.
Petrobras says it is confident with the granting of an environmental license to drill the first well in Amapá, guaranteeing the opening of a new exploratory frontier in the country, despite resistance from environmentalists.
Still, the assessment is that the geological similarities between the West coast of Africa and the main Brazilian basins make African assets a promising alternative in this effort to replace reserves.
“It is known that Brazil and Africa were together. So we know that geology mirrors each other”, said the company’s Exploration and Production director, Sylvia dos Anjos, last week. “If we go somewhere outside Brazil, Africa is a good place.”
