BRAZIL'S STATE-RUN OIL GIANT PETROBRAS SHIFTS FOCUS TO AFRICA. (PHOTO)

 Brazil's state-run oil giant Petrobras shifts focus to Africa

Petrobras aims to make Africa its main region of development outside Brazil, the state-run oil giant's CEO told Reuters news agency during a wide-ranging interview about the company's strategy, TRT Afrika reported.

Côte d'Ivoire has extended the "red carpet" for Petrobras to explore deep and ultra-deep waters off its coast, when it gave the company preference in buying nine offshore exploratory blocks on Wednesday, said Petrobras CEO Magda Chambriard.

She added that Nigeria, Angola, and Namibia have also expressed interest in working with the Brazilian giant.

"We are experts in the eastern margin of Brazil," Chambriard said on Thursday, citing geological similarities between the region and Africa. "The correlation between Brazil and Africa is unequivocal, so we need to go to Africa."

The company's plans in Africa have already started being implemented.

Target in Namibia

In 2023, it bought a stake in an offshore oil field in South Africa. Both South Africa and Brazil are key members of the club of world’s emerging economies that aims to counter Western dominance.

Similarly, in early 2024 Petrobras purchased an interest in fields in the island nation of Sao Tome and Principe, where it hopes to drill a well this year, Chambriard said.

"We hope to be invited" to develop Mopane oil field in Namibia, Chambriard added, without giving further details.

The latest move by Brazil comes amid changing global geopolitics and economic dynamics, with both world’s major industrialised countries and emerging economies focusing on Africa and its vast resources.

In recent years, Petrobras has shown an interest in buying stakes in oil assets abroad, especially in Africa, as it looks to boost reserves while it faces delays in obtaining environmental permits to drill for new oil off the coast of the Amazon rainforest.

Petrobras' plans mark a return to the African continent after the company divested assets in the region under previous governments, as part of a broad plan that made the company focus on high-productivity areas in Brazil's pre-salt fields.

Petrobras is also seeking to explore India's coast, taking part in an upcoming oil block auction scheduled for July, Chambriard said.

The plans to explore new oil fields are part of Chambriard's strategy to handle the critical task of balancing President Luiz Inacio Lula's ambitions to use Petrobras to boost the economy with delivering profits to its investors, all while contending with the global challenge of lower oil prices.

Cutting costs

Petrobras, a cornerstone of Brazil's economy, is also at the center of high-stakes tension within Lula's administration, which aims to leverage oil revenues for economic growth while showcasing Brazil, the host of the upcoming COP30 climate summit, as a champion in the global fight against climate change.

The company's plans to drill for oil off the coast of the Amazon rainforest, in the Foz do Amazonas region, have faced delays in obtaining environmental permits.

But Chambriard told Reuters she believes the company will clear the last step to getting a permit to drill in the region in the second half of July.

Lower Brent oil crude prices have pushed the company to cut costs and simplify projects in Petrobras' upcoming strategic plan for the 2026-2030 period, Chambriard said.

During the firm's first-quarter earnings call with analysts last month, Chambriard had already signaled a move towards austerity, pleasing investors. But Chambriard did not clarify whether cost-cutting efforts would impact the company's investment plans.

If confirmed, a retreat from investment plans could mark a stark reversal for the Brazilian oil giant since Lula took office in 2023 and pushed the company to invest more to boost Brazil's economy.