MercoPress. South Atlantic News Agency

Petrobras CEO says oil will lead Brazil's energy transition

Chambriard has already been in charge of the company since late May when she replaced Jean-Paul Prates

Despite being de-facto the new CEO of Brazil's state-run oil company Petrobras for a while, Magda Chambriard took her oath of office Wednesday during a ceremony in Rio de Janeiro, Agencia Brfasil reported. In her speech at the event attended among others by President Luiz Inácio Lula da Silva, Chambriard insisted that oil would lead the way into energy transition progressively reducing carbon emissions and zeroing them by 2050.

The executive also said that Petrobras' management would be in line with the search for profitability while contributing to the country's challenges. In her view, natural gas should be considered a “transition fuel” as the company strengthens its renewable energy fronts with 11% of investments allocated to low-carbon projects. “We're going to take advantage of our expertise and focus on the green fuels of the future. We will also advance in wind, solar, and hydrogen energy,” she explained.

Despite her symbolic inauguration, Chambriard has already been in charge of the company since late May when she replaced Jean-Paul Prates.

While recalling the finite availability of oil, she said that a transition must take place without jeopardizing the country's energy security. She pointed out that this process comes at a cost and that, hence, Petrobras needs to expand its exploratory frontiers, respecting environmental legislation and licensing processes. “Someone has to finance this transition. Investments in exploration and production are fundamental. You can't talk about transition without mentioning who is going to foot the bill. And it's oil that's going to pay that bill,” she stressed.

Wednesday was the first time in 12 years that a President has attended the swearing-in ceremony of a Petrobras CEO on the company's premises. The last time had been when Dilma Rousseff chose Graça Foster to head the company.

In his message, Lula da Silva underscored Petrobras' role in leading the energy transition. He also recalled that it was Brazil's largest company, with 45,100 workers. The Federal Government holds just over half of Petrobras shares, the other part being in the hands of private investors.

“The truth must prevail for the Brazilian people. Nobody wants any shareholder to lose a penny. If they invested they are entitled to a return on their investment. Nobody wants Petrobras to be a loss-making company, to lose money. I want Petrobras to be a profitable company, the more profit, the more investment, the more tax it will pay, and the happier [Finance Minister Fernando] Haddad will be for the Treasury to help mayors and states,” said Lula.

The president also highlighted what he expects from the company in the coming years, with more investment in oil refining, natural gas production, a fertilizer factory, and scientific research to overcome fossil fuels as an energy matrix in the future. “Since the first day in office, we have been working for a more integrated Petrobras, with investments in refining, gas, and fertilizer production, and in research for the energy transition. And for the resumption of the company's role as an inducer of national development, which is fundamental to our project of making Brazil a more developed and fair country,” said Lula, citing that the company's Strategic Plan 2024/2028 foresees investments of US$ 102 billion, 31% more than in the previous period.

A key player in Brazil's industry, Petrobras has a supply chain of more than 234,000 registered companies. Its foreign sales volume represents 8% of Brazilian exports, and the company generates hundreds of billions in taxes and special participation for the federal, state, and municipal governments.

“Those who wanted to destroy Petrobras will never succeed. Even when oil is no longer the reason for Petrobras' existence, it will be an energy company. It will refine our biodiesel, it can produce green hydrogen, it can produce a whole host of other things. And now, it can help face up to Russia's war with Ukraine by helping to recover the fertilizer factory that we so desperately need in order to recover this country,” Lula also said.