Petrobras may review projects over gas market rules

By Brazil Stock Guide – Petrobras Chief Executive Officer Magda Chambriard said Friday (Aug. 7) that the state-controlled oil producer may review ongoing projects if Brazil changes regulations governing natural gas sales. Petroleo Brasileiro SA trades under the tickers PETR3 and PETR4 in São Paulo and PBR in New York.

The warning comes as Brazil’s ANP oil and gas regulator considers requiring Petrobras to sell natural gas through auctions. The proposal, known as “gas release,” is intended to reduce the company’s market share and is open for public consultation for 45 days.

Profitability concerns

Speaking on a conference call with analysts about second-quarter results, Chambriard criticized the potential intervention and emphasized the company’s responsibility to generate returns.

“We are not an NGO. We are a company, and we have to make a profit,” Chambriard said.

She did not identify which projects could be reassessed if the regulator moves forward with the proposal.

Supply and price questions

William Nozaki, Petrobras’ executive director for energy transition and sustainability, said transferring ownership of gas to other market participants would not necessarily increase supply or lower prices.

Petrobras plans to submit its position as part of the ANP’s public consultation, Nozaki said.

Chief Commercial and Logistics Officer Angélica Laureano said the company holds a 56% market share. That level indicates the presence of competition and does not support classifying Petrobras as a dominant supplier, according to the executive.

“There is no reason to talk about ‘gas release’ in a market that already has competition,” Laureano said.

Auction proposal

The mechanism under consideration would require Petrobras to offer volumes of natural gas through auctions, creating more room for other companies in the market.

Petrobras executives argue that transferring ownership of the commodity would not, by itself, produce the expected effects on availability or prices.

Overseas oil opportunities

On the same earnings call, Exploration and Production Executive Director Sylvia Anjos said Petrobras is evaluating opportunities to explore for oil outside Brazil as part of its effort to replenish reserves.

The company is looking at potential opportunities in Ivory Coast and Mexico, Anjos said, without providing details about specific projects or negotiations.