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Why Petrobras is sticking to its upstream roots

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05 August 2022

Why Petrobras is sticking to its upstream roots

Report summary

Petrobras has emerged stronger from a corruption scandal and a massive pile of debt thanks to much improved governance that allowed better financial decisions, more strict cost and project controls, and an active portfolio management. Coupling this with the highly productive pre-salt fields, Petrobras will be able to provide robust cash flows to its investors during the next two decades. However as the world energy companies face a balancing act between energy transition and provide affordable fossil fuels in a short-term, Petrobras' efforts are mainly limited to control scope 1 and 2 emissions and facing political pressures to change fuel pricing policies. This is an uneasy situation considering that the company's reserves are not as big as other NOCs that are maintaining similar strategies. Petrobras needs to take the advantage of being a leaner and profitable company and establish a more robust energy transition strategy.

Table of contents

    • Upstream focus will still dominate the next five years
    • Divestment: increased upstream concentration and retaining the lowest emitting assets
    • Will exploration be enough to replenish reserves?
    • Cash flow generation: upstream versus renewables
  • Political backdrop
  • Potential energy transition scenarios

Tables and charts

This report includes 9 images and tables including:

  • NOCs' percentage of 2022 capital directed to the energy transition
  • Deal count
  • Deal valuations
  • Emissions intensity comparison
  • Reserve replacement comparison
  • Petrobras production forecast
  • NOCs 2022 capital allocation vs. resource life
  • Petrobras cashflow forecast
  • Cash flow comparison - Renewables

What's included

This report contains:

  • Document

    Why Petrobras is sticking to its upstream roots

    PDF 1.22 MB