Sao Paulo — Brazilian state-run oil company Petrobras on Thursday said its board of directors had approved a revision of part of its 2023-2028 strategic plan in a bid to increase investments in low-carbon initiatives.
Petroleo Brasileiro SA, as the company is formally known, said in a securities filing that under the new plan it would target 6% to 15% of its total capital expenditure (CAPEX) for low carbon, up from 6% in the 2023-2027 strategic plan.
The move, Petrobras said, is aimed at preparing the company for the energy transition, “reconciling the current focus on oil and gas with the search for diversification of our portfolio in low-carbon businesses.”
Chief Executive Jean Paul Prates, who was appointed to his position earlier this year by President Luiz Inacio Lula da Silva, had previously said that under his watch the company would seek to drive a transition to renewables while keeping its oil expansion on track.
Based on the annual CAPEX of Petrobras’ last strategic plan, according to JPMorgan analysts, the new commitment would mean about $1 billion to $2 billion per year in investments in renewable energies and decarbonization of operations.
“The newly announced goal posts a material increase compared to the previous commitment,” JPMorgan said, noting that the energy transition is “gaining relevance” at the firm.
Shares in Petrobras were up 2.5% in midday trading, making it one of the top gainers on Brazil’s benchmark stock index Bovespa, which rose 0.9%. Brent oil prices also gained in the day.
Petrobras’ announcement to boost low-carbon investments comes as it bids for a license to drill a controversial well near the mouth of the Amazon river, which the firm sees as a “low-risk” activity but has been previously rejected by environmental agency Ibama.
The firm’s new five-year strategic plan is expected to be fully disclosed by the end of this year.
Reporting by Gabriel Araujo; Editing by Steven Grattan and Mark Porter – Reuters
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