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Thursday, July 18, 2024

New Petrobras CEO Says Oil Prospect is of “National Interest”

Maritime Activity Reports, Inc.

May 27, 2024

By: Rafael Pereira / Petrobras Agency

By: Rafael Pereira / Petrobras Agency

Petrobras' new chief executive said a basin in Brazil's Equatorial Margin, an environmentally sensitive offshore prospect seen as the country's most promising frontier for oil exploration, was a matter of "national interest."

Magda Chambriard, who took over as the state-controlled oil company's chief executive after President Luiz Inacio Lula da Silva fired its former CEO this month, said on Monday she wanted to escalate talks about the region near Guyana to the National Council of Energy Policy (CNPE), which advises the president.

In her first public comments since taking the company's helm on Friday, Chambriard said replenishing oil reserves was a priority for Petrobras, and that exploring the Equatorial Margin was part of that effort.

Petrobras has been waiting for about a year for Brazil's environmental agency Ibama to rule on an appeal after the agency denied it the license to drill in the area, which is about 175 km (109 miles) off the coast of the state of Amapa, in the Amazon region. Ibama's initial ruling cited the project's potential impact on the environment and Indigenous peoples.

The offshore basin is seen as a potential bonanza because it shares geology with nearby Guyana, where Exxon Mobil is developing huge fields.

Chambriard said discussions on whether or not to explore the area should not be left to one single government body, without specifying whether she meant Ibama, the environment ministry or some other organization.

"I think that every time we restrict a discussion to a single institution, and do not expand this discussion to national interests, we lose," Chambriard said.

The discussion on exploring the region must take into account the potential benefits to Brazilian society, she said.

Chambriard noted that the president would be the one to sign off on any deliberation by the CNPE.

"Every deliberation of the National Council of Energy Policy is signed by the president."

Many of Chambriard's statements echoed those made by her predecessor, Jean Paul Prates, who Lula fired after members of his cabinet accused him of failing to deliver on investments that would prop up Brazil's economy and create local jobs.

Like Prates, Chambriard promised investments in the refining and fertilizer sectors, as long as they are profitable for the firm.

Tasked by Lula to speed up the firm's $102 billion investment plan for 2024 to 2028, Chambriard said Petrobras would follow governance and compliance rules, but hoped to surmount roadblocks by talking to independent bodies that have oversight over the firm such as Brazil's federal audit court (TCU).

Chambriard also said Petrobras would maintain its current pricing policies for gasoline and diesel sales, stressing that the company had to be profitable while also meeting shareholder needs.

Petrobras implemented last year a more market-based fuel pricing policy for gasoline and diesel sales to favor greater flexibility while avoiding drastic price swings.

Chambriard, a former head of oil and gas regulator ANP, vowed to better insulate the company's fuel prices from international market volatility.

(Reuters - Reporting by Fabio Teixeira and Rodrigo Viga Gaier; Editing by David Alire Garcia and Jamie Freed)