Brazil's Petrobras unveils $5.2bn renewables plan, but oil exploration budget balloons

Brazilian oil giant Petrobras has set aside $5.2bn for renewables out of a gargantuan $102bn five-year spending plan.

The latest version of the state-controlled company’s annually updated business plan earmarked the new capital expenditure commitments for wind and solar PV power between 2024 and 2028.

In the previous plan, Petrobras did not designate a specific capex budget for renewables projects that were in the study phase, but said $4.4bn of a total $78bn capex budget would be spend on low carbon initiatives.

In the new plan, renewables will account for about half of the $11.5bn capex budget for low carbon projects, including the capture, storage and utilization of carbon (CCUS), biorefining and hydrogen.

Research and development in low carbon initiatives was given a capex budget of $700m.

Partnerships and plans

Petrobras has already forged partnerships and set out plans in a Brazilian offshore wind sector that has been awaiting legislative approval of a proposed regulatory framework which was drafted by current CEO and, a former senator, Jean Paul Prates.

The state-controlled company has said it plans to build up 30GW of offshore win capacity and has signed memorandums of understanding for potential partnerships with TotalEnergies and Casa dos Ventos and also with Norway's Equinor.

Petrobras has said it will introduce solar PV power to its refineries across Brazil.

New frontiers

On the other hand, Petrobras also announced an aggressive increase in funding for find new oil and gas reserves.

The company’s 2024-28 business plan allocates $7.5bn for exploration, of which $.3.1bn is for the “equatorial margin”, offering a whole new frontier for Brazilian oil and gas off country’s northern coast.

Capex allocated for exploration was up 25% from the previous plan's $6bn.

Allocating capex for major new exploration plays in this way puts Petrobras at odds with the International Energy Agency’s call for oil and gas producers to supply the world from, and around, known fields.

The IEA says oil companies should focus on the energy transition rather than going after finding and developing new oil and gas or opening up new regions for fossil fuel exploitation.

In all, the new Petrobras business plan allocates a total $73bn for the exploration and production of oil and gas, of which 67% is in the ultra-productive pre-salt fields which, the company says, offers the best possibilities for the lowest carbon intensity in the upstream stages.

Paul Prates stated: “It will still be necessary to invest in exploration and production in order to meet demand. For this reason, we seek to incorporate reserves and develop new exploration frontiers to help meet global demand for energy during the the energy transition, and with the lowest carbon footprint possible.”