Petrobras has no plans to channel investments into the renewable energy sector where it lacks core competence, even though it will include de-carbonisation in its future objectives and its research and development portfolio, according to chief executive officer Roberto Castello Branco.

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Petrobras last week pledged to cut its own carbon emissions by 25% through 2030, even though its fossil fuel production could actually grow over the decade, depending on divestments.

“We are not going to do things where we do not have competence, in sectors like wind or big solar projects," Castello Branco said in an interview forum at the Rio Oil & Gas 2020 digital event on Thursday.

"If my big potential wealth creator is under the sea bed and that is something I know how to do, then my investments will reflect that.

"I will keep looking further afield in my research and we can see if we can make money in other areas, then we will invest...hydrogen perhaps," the head of the state-controlled oil and gas giant said in an interview packed with forthright comments.

With its ultra-productive pre-salt assets, Petrobras has aligned itself with big US oil giants — such as ExxonMobil and Chevron — in focusing its future investment plans on oil production.

Castello Branco has sometimes dismissed zero-carbon pledges by mainly European international oil companies as a fad, questioning why a random year such as 2050 was chosen, despite all the inherent uncertainties with such forecasting.

He stressed, however, that the company sees investing in reducing the carbon footprint of its own projects as a pivotal part of its strategy.


"Petrobras will dedicate more research, technology and innovation not just to advance in our business of producing oil... but also in reducing carbon, with ever-cleaner production," Castello Branco said.

The Petrobras CEO did not put a figure on how much of the company's future investments in R&D will be geared to clean energy.

Speaking on another Rio Oil & Gas panel, the head of Shell's Brazil unit Andre Araujo provided a contrasting position when he said the Anglo-Dutch giant will earmark 30%-35% of its future R&D budget for new energies as from 2021, compared to 10% of the budget before the change.

Shell has said that 35% of its total investment budget will be geared to new energy.

“The low-carbon economy presents real business opportunities," Araujo stated.

Interviewed online by Brazilian Petroleum Institute (IBP) president Clarissa Lins in part of the Rio Oil & Gas event, Castello Branco stated that Brazil's vocation as a supplier of raw materials to big economies such as China would support continued development of the oil and gas sector.

Exports of Brazilian crude to China have continued to rise in 2020, and sales of the heavier grades of Brazilian crude have opened the way for introducing the light Buzios pre-salt crude to the market, Castello Branco said.

Chinese interest in the eight domestic Petrobras refineries up for sale is also expected to increase this trend.

“It is a mistake to say that exports of raw materials are in some way an inferior form of trade. Extracting oil is as sophisticated and technologically challenging activity as, say, manufacturing a car,” Castello Branco claimed.


Petrobras shares its bullish view of future global demand for hydrocarbons – and the company's own capacity to meet that demand – with some of the biggest U.S-based oil companies.

While European companies such as BP, Eni and Total have backed pledges to achieve net zero carbon emissions with robust commitments to invest in renewables, ExxonMobil and Chevron have focused increasingly streamlined investment budgets on parts of their oil and gas portfolio offering the best returns, mitigated by commitments to reduce the carbon intensity of their businesses.

Chevron underlined its own vision on this point again last week by earmarking at least $300 million for investing in advancing energy transition in 2021.

The modest figure came among updated guidance figures that saw organic capital and exploratory spending of $14 billion estimated for 2021 and such spending pared back to between $14 billion and $16 billion per year in 2022-2025, with the vast majority of this still in the upstream sector.

Renewables fad

Despite rubbishing what he termed a renewables "fad" among European oil companies, Castello Branco pointed out that Petrobras recently took the decision to give its environmental, social and governance department a higher profile, as well as creating a new corporate division for climate change.

Petrobras reduced capital expenditure by 27% in its new 2021-2025 business plan and is pursuing a $35 billion divestment plan that includes oilfields, refineries and pipelines.

Its total debt is forecast to fall below $60 billion in 2022.

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Petrobras' crude production is expected to range between 2.7 million and 3.3 million barrels per day during the business plan — depending on the sale of assets — with pre-salt fields accounting for 80% of output by 2025.

Exploration and production director Carlos Alberto Oliveira stated that the company's total output could resume its upward march in the second half of the decade.