Brazil halts dumping of Petrobras assets to pursue new energy policy

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Brazil’s Ministry of Mines and Energy froze the state-controlled Petrobras’ sale of assets as the new Lula administration looks to implement a new energy policy.

Petrobras reported the suspension from the Ministry last 90 days, while a reassessment of the National Energy Policy gets underway. The review also seeks to establish a new composition of Brazil’s National Energy Policy Council (CNPE).

“The Board of Directors will analyse the ongoing processes, from the standpoint of civil law and within the rules of governance, as well as any commitments already made, their punitive clauses and their consequences, so that the governance bodies assess potential legal and economic risks arising, subject to the rules of secrecy and other applicable governing rules,” Petrobras said in response to the directive.

Last year, Petrobras had started dumping assets; refineries and all its shares from a large chunk of its onshore and shallow water assets.

This includes all its stakes in the producing fields of Peroá and Cangoá and in the BM-ES-21 concession, jointly called the Peroá Cluster and the Ponta do Mel and Redonda fields, located in the Potiguar Basin. Additionally, Petrobras has completed the sale of its entire stake in the 10 fields that comprise the Pampo and Enchova Clusters, located in shallow water in the Campos Basin.

The company was shifting resource focus on assets in deep and ultra-deep waters.

But the new directive to Petrobras aligns with President Lula’s plan to revamp the state-owned oil company.

Americas Market Intelligence (AMI) Analyst, Arthur Deakin predicted this.

Deakin said the divestment of state-owned energy assets will freeze, but concluded privatisations are not expected to be reversed, as that would be costly.

Petrobras is also expected to invest more in refineries, natural gas, biofuel, fertiliser and renewable assets. He said offshore wind and production of biofuels, in particular, will become a key part of Petrobras’ transition.

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