$111 billion investment on Petrobras’ five-year agenda

Brazil’s state-owned oil and gas giant Petrobras has unveiled its new business plan for the 2025-2029 period (BP 2025-29) and strategic plan 2050 (SP 2050), outlining its focus and priorities to reinforce its long-term vision. While the first envisions a multibillion-dollar investment program, the second one showcases the Brazilian player’s vision of striking a balancing act between oil and gas developments and low-carbon businesses.

Petrobras’ plan for the 2024-2028 period indicated that oil and natural gas would be given the biggest slice of the Brazilian player’s $102 billion investment pie, as the firm perceived these sources as drivers of growth that would propel and fund the energy transition to greener sources of supply.

The firm’s board of directors has now approved its new plan, separated into two parts: the BP 2025-29, with short and medium-term goals, aiming to build the company’s path to the future based on its strategic positions, and the SP 2050, which intends to reflect on the future of the planet and how the company wants to be recognized in 2050.

The five-year plan spotlights the company’s focus on efforts to take advantage of opportunities in the oil and gas market, with a focus on replacing reserves, increasing production with a lower carbon footprint, and expanding the supply of more sustainable and higher-quality products in its portfolio.

To this end, the BP 2025-29 plan forecasts investments of $111 billion, with $98 billion for projects under implementation and $13 billion for those under evaluation, consisting of opportunities with a lower degree of maturity and subject to additional financing studies before the execution begins. The total investment expected in the next five years is 9% higher than the volume projected in the last strategic plan 2024–28.

Petrobras has earmarked $77.3 billion for its Exploration and Production (E&P) segment over the upcoming five years, which is 5% higher than in the previous plan. The firm is allocating around 60% to pre-salt assets and carrying out major revitalization projects (REVITs), seeking to increase recovery factors in mature fields, especially in the Campos Basin.

As a result, ten new production systems will be implemented by 2029, with technologies that are expected to allow for greater efficiency and lower emissions, nine of which have already been contracted. Petrobras also confirms five more projects are being implemented beyond 2029 and another six projects are under study. The Brazilian player is the operator of all these projects, except for Raia, which is operated by Equinor.

The company plans to achieve total production of 3.2 million barrels of oil and gas equivalent per day (boed), of which 2.5 million barrels of oil per day (bpd). In a bid to replenish reserves, Petrobras has increased investments in exploration activities, totaling a CAPEX of $7.9 billion, or 5% higher than in the previous plan.

The proposed plan also includes projects to increase the availability of gas and a closer look at mature assets to assess the possibilities for extending the productive life of the assets and their production systems and, in the last instance, starting decommissioning activities with the best sustainability practices in the disposal of assets at the end of their life cycle. The sustainable disposal of equipment and the abandonment of wells is estimated to require an expenditure of $9.9 billion over the next five years.

Petrobras’ Natural Gas and Power (G&P) segment will receive total investments of $2.6 billion, maintaining the initiatives outlined in the previous plan with a focus on the reliability and availability of its assets, including projects for emissions reduction and initiatives for the integration of renewable sources. The company is considering the development of two thermal power plants (TPPs) in the Boaventura Energy Complex in Itaboraí (Rio de Janeiro), with the implementation of these projects being conditional on success in future energy capacity reserve auctions.

Regarding low-carbon energies for scope 3, the approved plan considers projects and research in onshore renewable generation (wind/solar); bioproducts (ethanol, biodiesel, and biomethane); low-carbon hydrogen; carbon capture, utilization, and storage (CCUS); etc.

Considering all low-carbon initiatives for scopes 1, 2, and 3, the total investment is expected to reach $16.3 billion in the energy transition, which aside from low-carbon energy projects entails decarbonization and research & development (R&D) that involves all segments, representing 15% of the total CAPEX, compared to 11% in the previous plan, and a 42% increase compared to the previous plan.

The six decarbonization commitments for scopes 1 and 2 emissions proposed in the previous plan are maintained for the BP 2025-29, such as reduction of total absolute operational emissions of 30% by 2030 compared to 2015; zero routine flaring by 2030; reinjection of 80 million tCO2 by 2025 in CCUS projects; GHG intensity in the E&P segment of 15 kgCO₂e/boe by 2025, maintained at 15 kgCO₂e/boe by 2030; and the reduction in the methane emissions intensity in the upstream segment by 2025, reaching 0.25 t CH₄/thousand THC, and reaching 0.20 t CH₄/thousand THC in 2030. 

Regarding ambitions associated with carbon footprint reduction, the goals include achieving operational emissions neutrality by 2050, the near zero methane 2030 target, and neutral net growth by 2030, not exceeding the 2022 emission level of 40% reduction since 2015, even with the increase in production and activities planned in the BP 2025-29.

“From a financial perspective, the priority is a more adequate, flexible and efficient capital structure, with cash generation higher than investments and financial obligations, while maintaining solid project approval governance, which guarantees profitable investments approved only with a positive net present value (NPV) in a robust scenario. With high-return projects, the company aims to ensure that the value generated is distributed to society through dividends and taxes,” underlined Petrobras.

On the other hand, the strategic plan 2050 is said to preserve Petrobras’ vision of being “the best diversified and integrated energy company in value generation, building a more sustainable world by balancing the focus on oil and gas with diversification into low-carbon businesses.” The Brazilian player underlines that this entails petrochemical products, fertilizers, and biofuels, sustainability, safety, respect for the environment, and full attention to people.

Petrobras claims that it has the competitive edge of low-cost oil production and one of the lowest carbon footprints in the world, making it possible to “reconcile leadership in the just energy transition with responsible oil and gas exploration” to keep future production levels close to the current ones.

The company elaborates that its planning incorporates the ambition to maintain its current relevance in supplying energy and in the economic development of Brazil, rising from 4.3 exajoules (EJ) in 2022 to 6.8 EJ in 2050, preserving its representativeness at 31% of the country’s primary energy supply while also reaffirming its ambition to neutralize its operational emissions by 2050.

The Brazilian giant underscored: “SP 2050 and BP 2025-29 demonstrate Petrobras’ commitment to reconciling oil and gas exploration and production with leadership in the just energy transition. The company is preparing itself for the routes of this transition with an increase of investments in energy transition and portfolio diversification in a responsible and profitable way.

“The SP 2050 outlines the path Petrobras will take as a leader in the just energy transition, reducing its emissions, maintaining its share in Brazil’s energy supply, and increasing the role of renewable energies in its portfolio, thereby contributing to the country’s energy security.”