Posted on December 4, 2024
Petrobras’ Board of Directors (CA) approved, in a meeting held this Thursday (11/21), the Strategic Plan 2050 (PE 2050) and the Business Plan 2025-2029 (PN 2025-29). During the process of preparing the Plans, the CA participated in discussions with the technical areas and the Executive Board, leading to the conclusion and approval of the final document.
With the aim of reinforcing its long-term vision, Petrobras separated its plan this year into two parts: PE 2050, which proposes reflecting on the future of the planet and how the company wants to be recognized in 2050; and PN 2025-29, with short and medium-term goals, aiming to pave the company’s path to the future based on its strategic positions.
The 2050 Strategic Plan preserves Petrobras’ vision of being the best diversified and integrated energy company in generating value, building a more sustainable world, reconciling the focus on oil and gas with diversification into low-carbon businesses (including petrochemical products, fertilizers and biofuels), sustainability, safety, respect for the environment and total attention to people.
For the 2025-29 PN, Petrobras expects to invest US$111 billion, of which US$98 billion will be in the Portfolio of Projects Under Implementation and US$13 billion in the Portfolio of Projects Under Assessment, which comprises opportunities with a lower degree of maturity and subject to additional financeability studies before the start of implementation. The total investment expected for the next five years is 9% higher than the volume expected in the 2024-28+ SP.
Petrobras has the competitive advantage of producing oil at low costs and with one of the lowest carbon intensities in the world. These conditions allow it to reconcile its leadership in the fair energy transition with the responsible exploration of oil and gas in the country, in order to maintain future production levels close to the current ones. Thus, Petrobras’ planning incorporates the ambition that the company should maintain its current relevance in the energy supply and economic development of Brazil, increasing from 4.3 exajoules (EJ) in 2022 to 6.8 EJ in 2050, maintaining Petrobras’ representation in 31% of Brazil’s primary energy supply. In addition, Petrobras reaffirms its ambition to neutralize its operational emissions by 2050.
In the five-year period from 2025 to 2029, the company will focus its efforts on taking advantage of these opportunities in the oil and gas market, focusing on replenishing reserves, increasing production with a smaller carbon footprint and expanding the supply of more sustainable and higher quality products in its portfolio.
From a financial perspective, the priority is a more adequate, flexible and efficient capital structure, with cash generation higher than investments and financial obligations, while maintaining solid project approval governance, which ensures that profitable investments are made and approved only with a positive net present value (NPV) in a robust scenario. With high-return projects, the company aims to ensure the distribution of the value generated to society, through dividends and taxes.
Breakdown of investment portfolios (CAPEX)
CAPEX for energy transition is transversal and totals US$ 16.3 billion
Exploration and Production (E&P)
With total investments of US$77.3 billion planned for the five-year period of the Plan (5% higher than the previous plan), the Exploration and Production (E&P) segment is allocating approximately 60% to pre-salt assets, consolidating a major phase of investments in this province and reinforcing its competitive edge through higher-quality oil production, with lower costs and lower greenhouse gas emissions. At the same time, the company is maintaining major revitalization projects (REVITs), seeking to increase recovery factors in mature fields, especially in the Campos Basin.
These projects stand out for their dual resilience (economic and environmental) and high economic value, making up a portfolio that is viable in scenarios of low oil prices in the long term, with prospective equilibrium Brent at an average of US$28 per barrel and carbon intensity of up to 15 kgCO2e per barrel of oil equivalent over the five-year period. The company also forecasts an average Total Cost of Oil Produced (CTPP) – which includes extraction costs, government shares, and depreciation and depletion – of US$36.5/boe during this period, considering government shares according to the average Brent estimated as a planning premise.
Ten new production systems will be implemented by 2029, using cutting-edge technologies that allow for greater efficiency and lower emissions, with nine already contracted. In addition, there are five projects under implementation beyond 2029 and six more projects under study. Petrobras is the operator of all these projects, with the exception of Raia, which is operated by Equinor.
Portfolio of new production systems
With this Plan, Petrobras expects to reach a total production of 3.2 million barrels of oil and gas equivalent per day (boed), of which 2.5 million barrels of oil per day (bpd). A variation margin of ±4% is considered to monitor the Plan.
Production Curve 2025-2029
To meet the challenges of replenishing reserves, Petrobras increased investments in exploratory activities, totaling CAPEX of US$ 7.9 billion in the five-year period (5% higher than the previous plan).
In parallel, the proposed Plan also includes projects that aim to increase gas availability and a closer look at mature assets, with the objective of evaluating the possibilities of extending the productive life of these assets and their production systems and, ultimately, initiating decommissioning activities, following the best sustainability practices in the disposal of end-of-life assets. The sustainable disposal of equipment and abandonment of wells will require expenditures of US$ 9.9 billion over the next five years.
Refining, Transportation and Marketing + Petrochemicals and Fertilizers (RTC)
PN 2025-29 allocates US$ 19.6 billion in total investments in the Refining, Transportation, Marketing, Petrochemicals and Fertilizers (RTC) segment, representing an increase of 17% compared to the previous plan.
Investments in refining are mainly aimed at increasing the capacity of Petrobras’ park, expanding the supply of high-quality products, such as Diesel S10 and lubricants, and low-carbon fuels. They also seek to improve the efficiency of the units by advancing the decarbonization of operations and increasing operational availability.
With the projects in the Plan’s RTC portfolio, it is planned to increase distillation capacity from 1,813 thousand barrels per day (bpd) to 2,105 thousand bpd, with emphasis on the RNEST projects, which include revamp (expansion) of Train 1 and completion of Train 2.
Petrobras will increase Diesel S10 production capacity by 290,000 bpd in its refining park, considering the projects in the Implementation Portfolio, and will have its first Group II lubricant unit (more modern), with a capacity of 12,000 bpd by 2029. In addition, with projects in the Evaluation Portfolio, there is potential to add Diesel S10 production capacity by an additional 70,000 bpd beyond 2029.
Under the BioRefining program, the company plans to offer low-carbon products with lower greenhouse gas (GHG) emissions, playing a leading role in the energy transition and meeting the growing demand for renewables. Through the program, Petrobras will expand its production capacity for Diesel R5 (with 5% renewable content) through co-processing, integrated with the operations of some units in its refining park.
There are also other projects and studies involving biofuels produced by different technological routes, with emphasis on dedicated Aviation Biokerosene – BioQav (SAF) plants and 100% renewable Diesel (HVO) via the HEFA ( Hydroprocessed Esters and Fat Acids ) route, in addition to studies of ATJ ( Alcohol to Jet ), a route for producing SAF through ethanol processing. Biorefining projects are also being evaluated in partnership with Refinaria Riograndense and Acelen.
The main investments in Marketing and Logistics focus on removing logistical bottlenecks and expanding operations in strategic markets. Of note are the initiative to build 16 new coastal shipping vessels and the implementation of logistics projects to increase presence in growing markets, such as investments in the Waterway Terminal of the Port of Santos and the construction of a new pipeline for light fuels to supply the Central-West region.
Additionally, there is the resumption of activities in the Fertilizer segments, with investments totaling, in the five-year period, US$ 900 million in projects such as the resumption of construction of the Nitrogen Fertilizer Unit (UFN-III), in Três Lagoas (MS), and the reactivation of the Araucária Nitrogenados SA (ANSA) fertilizer factory, in Araucária (PR).
In the Petrochemical segment, studies will be conducted for business opportunities in synergy with Refining.
Natural Gas and Low Carbon Energies
Natural Gas and Energy (G&E) projects will receive total investments of US$ 2.6 billion, maintaining the initiatives foreseen in the previous plan with a focus on the reliability and availability of its assets to ensure competitiveness in the operation and commercialization of gas and energy, in addition to including projects to reduce emissions and initiatives for the insertion of renewable sources.
PN 2025-29 considers the development of two thermoelectric plants (UTEs) in the Boaventura Energy Complex, in Itaboraí (RJ), with the implementation of these projects being conditional on success in future auctions for energy capacity reserves.
Regarding Low Carbon Energies (scope 3), the approved Plan includes projects and studies in the segments of onshore renewable generation (wind/solar); bioproducts (ethanol, biodiesel and biomethane); low carbon hydrogen; carbon capture, transport and storage (CCUS) and others.
Energy transition
Taking into account all low-carbon initiatives (scopes 1, 2 and 3), the total investment in energy transition amounts to US$16.3 billion, encompassing, in addition to projects in Low Carbon Energy, projects for decarbonizing operations and Research and Development (R&D) that permeates all segments. This volume represents 15% of the total CAPEX forecast for the five-year period (compared to 11% in the previous plan) and an increase of 42% compared to the previous plan.
Investments in energy transition
The company’s focus on low-carbon businesses is to diversify its portfolio profitably, promoting Petrobras’ sustainability. With regard to renewable energy projects, the company will seek to work preferably in partnership with large companies in the sector, with the aim of decarbonizing operations, integrating its portfolio of low-carbon solutions and capturing market opportunities in Brazil. With regard to bioproducts, which include the ethanol, biodiesel and biomethane chains, Petrobras will seek to enter these segments preferably through strategic minority partnerships or partnerships with relevant players in the sector.
In terms of total energy transition CAPEX, the company also relies on the Petrobras Carbon Neutral Program and a decarbonization fund, with a budget of US$1.3 billion for the period 2025 to 2029, with the purpose of financing decarbonization solutions selected for their potential to reduce emissions, considering cost and impact on carbon mitigation. In addition to intrinsic reduction efforts, Petrobras foresees, as a complementary tool, the use of quality carbon credit offsets to reduce its total emissions, increasing its contribution to maintaining standing forests and restoring ecosystems.
The six decarbonization commitments (scopes 1 and 2) proposed in the previous plan are being maintained for PN 2025-29, namely:
– Reduction of total operational absolute emissions by 30% by 2030 compared to 2015
– Zero routine flaring by 2030
– Reinjection of 80 million tCO2 by 2025 in CCUS projects
– Portfolio intensity of 15 kgCO2e/boe by 2025, maintained at 15 kgCO2e/boe by 2030 (E&P)
– Intensity of 36 kgCO2e/CWT by 2025 and 30 kgCO2e/CWT by 2030 (Refining)
– Reduction of 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 the ambitions associated with reducing the carbon footprint, the highlights are the search for neutrality of operational emissions by 2050, the “Near Zero Methane 2030” target and neutral net growth by 2030, not exceeding the 2022 emissions level (40% reduction since 2015), even with the increase in production and activities foreseen in PN 2025-29.
Financing
The PN 2025-29 financeability study resulted in the consolidation of a more efficient capital structure, with greater flexibility and low leverage in challenging scenarios.
The gross debt limit was revised to US$75 billion in the 2025-29 PN, after analyzing the most appropriate capital structure for the company, adhering to the minimization of the cost of capital, cash flow risks and efficient cash and liquidity management. The increase in the debt ceiling considers robust leverage metrics, even in scenarios of low Brent prices, in addition to providing greater flexibility in relation to the growing relevance of charters in gross debt.
Robust free cash flow allows for solid dividend forecasts, projecting $45-55 billion of ordinary dividends in the base case, with flexibility for extraordinary payments.
Consolidation of Sources and Uses
(bands with a view of the Total Portfolio)
1 Includes contingent and deferred payments and divestments
2 Funding raised, net of amortizations
3 Total investments
4 Includes extraordinary dividends declared on 11/21/2024
5 Increases in leasing mainly due to amounts included in operating cash generation and cash flow from investments in the previous plan
It is worth noting that the PN 2025-29 considers, among the premises for financeability, cash generation higher than investments and financial obligations; minimum cash of US$ 6 billion; gross debt reference range of US$ 55 billion to US$ 75 billion, with convergence at the level of US$ 65 million; and payment of dividends in accordance with the current Shareholder Remuneration Policy.
In essence, PE 2050 and PN 2025-29 demonstrate Petrobras’ commitment to reconciling leadership in the fair energy transition with oil and gas exploration and production. With increased investments in the energy transition and diversification of its portfolio, in a responsible and profitable manner, the company is preparing for the routes of this transition. PE 2050 presents the path that Petrobras will take as a leading company in the fair energy transition, reducing its emissions, maintaining its share of the energy supply in Brazil and with an increasing role for renewable energy in its portfolio, contributing to the country’s energy security. The mobilization of the company’s resources and its technical capacity, in addition to the innovation and partnership ecosystem, aim to develop solutions that benefit both Petrobras and Brazilian society, generating a multiplier effect on the economy and the country. Petrobras will continue to work with safety, financial responsibility, ethics, transparency and respect for people and the environment, investing in the present to build a sustainable future, generating jobs, paying taxes and distributing its profits to society and its shareholders.
