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The board of directors of Petrobras has approved new guidelines in the strategic plan through 2028 to allocate more capital expenditures to low-carbon projects, the Brazilian state-owned oil firm said on Thursday.
Under the new strategic guidelines, Petrobras will allocate between 2024 and 2028 between 6% and 15% of its capex to low-carbon energy projects, compared to 6% of capex going to low-emission projects in the 2023-2027 strategic plan.
The final approval of the new strategic plan and allocation for low-carbon projects will take place in November 2023, the company said today.
Low-carbon capex will include projects in renewable energy and the decarbonization of Petrobras’ operations.
The company stressed that those investments should be financed by operating cash flow and at levels equivalent to its competitors. Petrobras also prefers to make investments in low-carbon projects through partnerships that allow sharing of expertise as well as risks.
The projects will be aimed at helping Petrobras become an integrated energy company and maximize its value, the firm said in a statement.
Earlier this year, Petrobras signed a five-year agreement with supermajor Shell to work together on identifying potential upstream opportunities, sharing experience and best practices on reducing carbon emissions, social and environmental initiatives.
The non-binding agreement will focus not only on potential exploration opportunities in and beyond the presalt layer offshore Brazil but also on energy transition efforts, with an emphasis on renewables and Carbon Capture, Utilization and Storage (CCUS). Petrobras and Shell will also work together to set up projects to preserve and restore biodiversity, with the goal of issuing credits to offset carbon emissions.
“Being able to rely on partners, such as Shell, is vital for Petrobras’s future plans, because partners can add their strength to areas where the company is looking for profitable diversification, such as renewables and hydrogen. We will be looking to learn from the main players as we lead Petrobras towards a fair energy transition”, Petrobras CEO Jean Paul Prates said in March.
By Charles Kennedy for Oilprice.com
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Charles is a writer for Oilprice.com