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Brazil to join OPEC+ but won’t cap oil output, Petrobras CEO says

Brazil is expected to join the OPEC+ group of oil-producing countries in January but would not take part in the group’s coordinated output caps, the chief executive of state-run oil firm Petrobras PETR4.SA told Reuters.

The group’s surprising announcement on Thursday that the South American nation would join it raised immediate questions on whether Brazil would take part in the production caps, as OPEC+ nations agreed to voluntary cuts approaching 2 million barrels per day (bpd) for early next year.

“There is no quota,” Jean Paul Prates said in an interview. “We would never be part of an organization that imposes (production) quotas to Brazil, Petrobras is a publicly-traded company and we cannot have quotas.”

Brazil’s energy minister said on Thursday the country waseager to join OPEC+ after a full technical analysis. President Luiz Inacio Lula da Silva’s office confirmed receiving the invite, but said he had not formally responded.

Brazil is the largest oil producer in South America, at 4.6 million barrels per day of oil and gas, of which 3.7 million bpd are crude.

Prates, who in October received OPEC Secretary General Haitham Al Ghais in Brazil, noted OPEC+ was a group that includes countries with no voting rights and to which production caps are not imposed, which would be the case of Brazil.

He welcomed Brazil’s move to join the group.

“Brazil would start participating in the meetings as some kind of observer member, which I think is really nice,” Prates said, adding the move would be key to OPEC’s and Brazil’s energy transition efforts.

He expects Brazil to formally accept the invitation by June.
Source: Reuters (Reporting by Rodrigo Viga Gaier; Writing by Gabriel Araujo; Editing by Steven Grattan)

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