Up to 85% of Petrobras' Future Oil Could Result in Losses Due to Decline in Global Demand, Study Indicates

Up to 85% of Petrobras’ Future Oil Could Result in Losses Due to Decline in Global Demand, Study Indicates

Written by Débora Araújo

Published on 13/06/2025 at 10:26

Updated on 13/06/2025 at 10:27

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International Report Warns: Petrobras’ Plans to Expand Oil and Gas Production May Result in Losses if the World Meets Climate Goals and Reduces Fossil Fuel Demand.

A study released this Wednesday (11) by international organizations points out that Petrobras’ plans to increase its oil and gas production by more than 20% by 2030 may not be profitable. The conclusion takes into account a global climate transition scenario that limits the increase in the planet’s average temperature to 1.5°C, as established by the Paris Agreement. According to the analysis, up to 85% of the production planned by the state company would incur losses in this context due to reduced demand.

Study Projects That Oil May Lose Value with Energy Transition

The report “Brazil at a Crossroads: Rethinking Petrobras’ Oil and Gas Expansion,” produced by the International Institute for Sustainable Development (IISD), World Benchmarking Alliance (WBA), and WWF-Brazil, evaluates the economic and environmental impacts of the state company’s projects for the coming years.

According to Ricardo Fujii, WWF-Brazil’s energy transition leader and co-author of the study, demand for fossil fuels is expected to decline in the coming years, putting downward pressure on prices. In this scenario, most of Petrobras’ future production would cost more than the selling price, making it financially unviable.

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Petrobras Expects to Invest US$ 97 Billion by 2029

Between 2025 and 2029, Petrobras plans to invest US$ 97 billion in oil and gas-related activities, including exploration, transportation, and refining. Part of this funding will be allocated to projects in sensitive areas, such as the mouth of the Amazon Basin, where the Brazilian government plans to conduct an auction for 47 offshore blocks in the coming days.

The expansion plan aims to make Brazil the fourth largest oil producer in the world, a position currently held by the United States, Russia, and Saudi Arabia. Today, Brazil ranks eighth in the ranking of the National Agency of Oil, Natural Gas, and Biofuels (ANP), and the state company accounts for more than half of the projected expansion.

Report States That Expansion is Only Profitable in a High Heating Scenario

The study warns that Petrobras’ ventures would only become profitable in a more severe climate scenario, with global temperature rise of at least 2.4°C. This outlook would indicate a failure in implementing policies to reduce fossil fuel demand.

“Considering the costs of Brazilian oil fields and the global competitive landscape, the company’s new projects would only yield returns in a dangerously overheated world,” the report states.

Population Supports Transition to Renewable Sources

A survey conducted by Pollfish for the Climainfo portal in 2024 shows that 81% of Brazilians believe that Petrobras should prioritize investments in renewable energy sources. Only 19% stated that the state company should maintain its focus on fossil fuel production.

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According to the report’s authors, this data reinforces society’s expectations regarding the company’s role in the global energy transition. The study further highlights that the company currently allocates only 15% of its budget to decarbonizing operations and energy diversification.

Experts Advocate Redefining Petrobras’ Role

For the analysts involved in the study, Brazil has the conditions to lead the global climate agenda. According to Joachim Roth from the World Benchmarking Alliance, this would require a redefinition of Petrobras’ mandate, focusing on sustainability goals and alignment with national energy transition policies.

“It is possible to prepare the economy for the future by halting new oil and gas licenses and integrating public and private transition plans,” Roth states.

Auction for New Blocks is Expected to Occur in the Coming Days

The release of the report comes just days before the federal government’s planned auction for new exploration areas. The initiative includes blocks at the mouth of the Amazon Basin, a region considered sensitive from an environmental standpoint.

This moment coincides with a global debate about the future of the oil industry and the commitments made under the Paris Agreement. Oil and gas production, while still relevant to the Brazilian economy, faces growing challenges in light of the need to reduce demand and adapt to the new global energy matrix.

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Up to 85% of Petrobras’ Future Oil Could Result in Losses Due to Decline in Global Demand, Study Indicates

International Report Warns: Petrobras’ Plans to Expand Oil and Gas Production May Result in Losses if the World Meets Climate Goals and Reduces Fossil Fuel Demand.

Study Projects That Oil May Lose Value with Energy Transition

Major Oil, Gas, and Energy Event Will Take Place in Brazil: Macaé Energy Will Gather Petrobras, Equinor, Prio, Among Other Suppliers and Energy Executives for Business, Networking, and Employment Opportunities

Petrobras Expects to Invest US$ 97 Billion by 2029

Report States That Expansion is Only Profitable in a High Heating Scenario

Population Supports Transition to Renewable Sources

Experts Advocate Redefining Petrobras’ Role

Auction for New Blocks is Expected to Occur in the Coming Days

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Up to 85% of Petrobras’ Future Oil Could Result in Losses Due to Decline in Global Demand, Study Indicates

International Report Warns: Petrobras’ Plans to Expand Oil and Gas Production May Result in Losses if the World Meets Climate Goals and Reduces Fossil Fuel Demand.

Study Projects That Oil May Lose Value with Energy Transition

Major Oil, Gas, and Energy Event Will Take Place in Brazil: Macaé Energy Will Gather Petrobras, Equinor, Prio, Among Other Suppliers and Energy Executives for Business, Networking, and Employment Opportunities

Petrobras Expects to Invest US$ 97 Billion by 2029

Report States That Expansion is Only Profitable in a High Heating Scenario

Population Supports Transition to Renewable Sources

Experts Advocate Redefining Petrobras’ Role

Auction for New Blocks is Expected to Occur in the Coming Days

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