Petrobras PETR3 aims to make Africa its main region of development outside Brazil, the state-run oil giant’s CEO told Reuters on Thursday during a wide-ranging interview about the company’s strategy.

Ivory Coast 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,” said Chambriard, citing geological similarities between the region and Africa. “The correlation between Brazil and Africa is unequivocal, so we need to go to Africa.”

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

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.

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.

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.

Meanwhile, the company’s plans in Africa have already started being implemented.

In 2023, it bought a stake in an offshore oil field in South Africa and in early 2024 it 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.

Despite the recent efforts, Chambriard said the firm was outbid by France’s TotalEnergies TTE for a share in Galp Energia’s offshore discovery in Mopane field, in Namibia.

“We hope to be invited” to develop Mopane, Chambriard added, without giving further details.

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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.

The firm is set to finally widen its role in Brazil’s fertilizer production, as it expects to resume operation on two plants in the states of Sergipe and Bahia by the end of the year, Chambriard said.

The CEO also confirmed a Reuters report that the firm is unhappy with the current level of control it has over petrochemical firm Braskem BRKM3, and is looking for changes to a shareholders agreement that could give the oil company more power in Braskem’s decision-making process.

Petrobras has a 47% voting stake in Braskem but has appointed four of its 11 board members and one director out of seven, representation it considers insufficient, Reuters reported last week.

Petrobras has no interest in having majority control over the firm, but it wants more power over it to “guarantee synergies,” Chambriard said, without providing further details.

Braskem is a “very important asset,” Chambriard said. But, she added, “from our current point of view, Braskem’s management is not what we want.”

Source: Reuters