Petrobras Eyes Major Return to Ethanol Sector with Potential Joint Venture

Brazilian state-controlled oil company Petrobras is in discussions with key players, including Raízen, BP, and Inpasa, for a potential joint venture in ethanol production, signaling a significant comeback to the biofuels sector.

Petrobras CEO Magda Chambriard announced the company's ambitious plans during a call about its $111-billion strategic plan for 2025-2029. She emphasized the company's intent to establish a major presence in ethanol, stating, “We have to do something big, compatible with the size of Petrobras.”

The company plans to invest $2.2 billion in ethanol distilleries over the next five years, according to Mauricio Tolmasquim, Petrobras' energy transition director. The firm is evaluating both sugarcane- and corn-based ethanol and aims to partner with established operators to accelerate its market entry. “The idea is to start big, not from scratch,” Tolmasquim explained, highlighting the strategic advantage of collaborating with leading companies.

This initiative comes as Petrobras repositions itself in the renewable energy landscape, reversing a 2017 decision to exit the biofuels sector. Chambriard noted the competitive importance of ethanol, which challenges gasoline—a fossil fuel set to lose market share as global energy systems transition.

Although discussions with Raízen, BP, and Inpasa are in preliminary stages, Petrobras' move underscores its broader expansion goals. Chambriard also reported that the company has been meeting its capital expenditure and production targets despite reducing its 2023 investment forecast to between $13.5 billion and $14.5 billion.

Petrobras' re-entry into ethanol signals a strategic shift, aligning with global trends toward cleaner energy and bolstering its presence in a key segment of Brazil's renewable energy market.

Source: Reuters