Petrobras prioritizes carbon cuts as Equinor pursues renewables in Brazil

FILE PHOTO: A man walks in front of the headquarters of Petroleo Brasileiro S.A. (Petrobas) in Rio de Janeiro, Brazil March 9, 2020. REUTERS/Sergio Moraes

RIO DE JANEIRO (Reuters) - Petrobras will invest in technologies to cut the carbon footprint of its oil extraction activities rather than in renewables over the next five years, the Brazilian state-controlled company’s chief executive said.

Roberto Castello Branco has repeatedly said Petroleo Brasileiro SA, known as Petrobras, has no comparative advantage in renewable energy and that many environmental targets put forward by its European competitors are fanciful.

His comments on Tuesday contrasted with those made earlier by Equinor ASA CEO Anders Opedal at an oil industry conference in which he said the Norwegian company was scouting for offshore wind opportunities in Brazil.

Opedal referred during the Rio Oil & Gas conference to a 2018 memorandum of understanding (MOU) between Equinor and Petrobras to pursue offshore wind projects in Brazil.

That has not so far resulted in any potential projects and Castello Branco’s comments suggest it is unlikely to do so.

“We do not expect to invest a dollar in renewables over the next five years,” Castello Branco said while discussing the company’s updated five-year business plan during a presentation to analysts and investors.

Petrobras was taking emissions-reduction seriously through other means, such as studying the use of hydrogen-powered ships, even for long-haul routes, Petrobras logistics and sales chief André Chiarini said in another presentation.

Castello Branco said that Petrobras is likely to sell a clutch of offshore natural gas pipelines via an initial public offering in the third quarter of 2021.

But this estimate could change, in part because the potential IPO requires an agreement with other stakeholders.

Reporting by Gram Slattery; Editing by Chizu Nomiyama, Paul Simao and Alexander Smith